Source: United States Senator for Ohio Sherrod Brown
WASHINGTON, D.C. – U.S. Senator Sherrod Brown (D-OH) led a group of colleagues in a letter to U.S. Department of Treasury Secretary Janet Yellen, urging her to provide tax relief to auto dealers experiencing inventory shortages due to global supply chain issues. Pandemic-related supply chain disruptions have impacted businesses and consumers, with slow-downs and factory closures, particularly with semiconductors, leaving businesses with drastically lower inventories. These disruptions could leave auto dealers in Ohio and across the country with unexpected tax liability if not addressed.
“The automotive industry is facing an unprecedented inventory shortage, and it will take many months to recover – which will continue to impact local businesses, employees, and their customers throughout our states and across the country,” wrote the senators. “It is critical to the health of the auto industry that we help businesses maintain their cash flow and replace their inventory over a period of up to three years as granted in Section 473.”
Supply chain disruptions have had far-reaching impacts in Ohio, from bottlenecks in the trucking industry to long delays in new home construction. While demand has remained strong over the last year, production has been hindered by insufficient materials across many industries. The shortage of microchips is a barrier to increased vehicle production, and paint producers have cited a drop in sales due to a lack of raw materials. Recent surveys by the Federal Reserve Bank of Cleveland have shown that uncertainty about the future has made companies hesitant to invest in additional capacity.
“The National Automobile Dealers Association appreciates Senator Brown’s leadership in urging Treasury Secretary Yellen to exercise her authority to help the auto industry recover from depleted inventory due to a COVID-related global supply chain interruption of vehicle production. With historically low vehicle inventories and the continued shortage of semiconductor chips, granting this petition will help dealerships replenish inventory and retain much-needed jobs during the still fragile economic recovery,” said Mike Stanton, President and CEO, National Automobile Dealers Association (NADA.
“Ohio’s franchised auto dealers are greatly appreciative of Senator Brown’s efforts to help our industry manage the impacts of unprecedented supply chain disruption. Granting temporary relief for dealerships unable to replenish vehicle inventories will help keep much needed working capital in these Ohio businesses. Most importantly, this will benefit the 41,000 Ohioans employed by franchised dealers,” said Zach Doran, President, Ohio Auto Dealers Association (OADA).
Brown’s letter was also signed by U.S. Senators Maggie Hassan (D-NH), Amy Klobuchar (D-MN), Patty Murray (D-WA), Angus King (I-ME), Catherine Cortez Masto (D-NV), Alex Padilla (D-CA), Chris Van Hollen (D-MD), Bob Casey (D-PA), Ben Cardin (D-MD), Tina Smith (D-MN), Richard Blumenthal (D-CT), Jacky Rosen (D-NV), Ron Wyden (D-OR), Diane Feinstein (D-CA), Tim Kaine (D-VA), Tammy Baldwin (D-WI), Raphael Warnock (D-GA), Debbie Stabenow (D-MI), and Gary Peters (D-MI).
Earlier this year, Brown urged the Taiwanese government to continue working to mitigate the ongoing semiconductor chip shortage that has impacted American auto manufacturers, causing plants to idle and resulting in layoffs for workers throughout the auto industry’s supply chain.
In addition to leading the effort to secure tax relief for auto dealers under Section 473, Brown also recently introduced the Supply Chain Resiliency Act, which would alleviate current supply chain bottlenecks and prevent future disruptions by investing in American companies to reduce our reliance on long supply chains and ensure that critical products are made in America.
The full text of the senators’ letter can be found here.
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