False Start on Potential LIFO Relief
Shortly after passing the Consolidated Appropriations Act of 2023, the omnibus bill that will fund the government for the remainder of the 2023 fiscal year, the Senate took up the Supply Chain Disruptions Relief Act (the Act). This bill would make available to new vehicle dealers the potential for LIFO relief related to a qualified liquidation of inventory, which generally results in the recognition of income, absent such relief. The Senate passed the Act unanimously on December 22, 2022, and the bill was then sent to the House. The House failed to take up this bill, or the parallel bill previously introduced in the House (H.R. 7382), prior to the close of the 117th Congress on January 3, 2023.
With the beginning of the 118th Congress, any potential for LIFO relief must start from the beginning of the legislative process as the bills from the 117th Congress that were not enacted are archived. As such, these bills must be reintroduced in the current Congress. This means that if LIFO relief is going to occur for new vehicle dealerships, then one or more bills will need to be re-introduced in Congress and the Senate and the House will need to vote to pass the legislation prior to it being presented to the president to sign into law.
We will continue to monitor the introduction of any new bills as well as the movement through the legislation process and will provide updates as they become available. Make sure to subscribe to our tax FORsights™ to receive our weekly issue of From the Hill, featuring tax-related legislative and regulatory updates. Submit the Contact Us form below if you have questions.