Arrington Leads Bipartisan Relief Effort for Auto Supply Chain Disruptions

This week, Representative Jodey Arrington (TX-19) and Representative Dan Kildee (MI-08) introduced bipartisan legislation – the Supply Chain Disruptions Relief Act – in the House of Representatives to provide temporary relief to car dealerships that have been impacted by massive disruptions to the global supply chain. 

“We have all seen the empty car lots and skyrocketing costs for automobiles nationwide. Supply chain disruptions have resulted in massive inventory shortages and punitive tax penalties that uniquely impact the auto-industry, leading to adverse consequences for both consumers and employers. I am proud to team up with Rep. Kildee to ensure we grant temporary and targeted relief to those who cannot replenish their inventory at no fault of their own. Allowing these small businesses to build back their inventory and spread out their tax liability will not only help stabilize prices, but it will also help keep workers on payroll while manufacturing and supply chains continue to recover,” said Rep. Arrington.

 “Car dealerships are important job creators in mid-Michigan and throughout America. Unfortunately, many dealers are facing enormous, unexpected tax bills because of unavoidable supply chain disruptions,” said Rep. Kildee. “I am proud to introduce legislation with broad bipartisan support from Republicans and Democrats to deliver much-needed relief to these small businesses.”

The bill would give dealerships up to three years to replace their inventory from 2020 or 2021, when global semiconductor shortages and supply chain disruptions were most acute. Absent this relief, dealers would be forced to pay massive recapture taxes impacting their ability to maintain payroll, stabilize prices, and replenish their inventory. 

“NADA commends Representatives Kildee and Arrington for their continued leadership to ensure the reintroduction of the Supply Chain Disruptions Relief Act, important bipartisan legislation to address supply chain and semiconductor shortages during the pandemic that severely impacted vehicle production. This legislation is identical to the bill from last Congress, which received overwhelming bipartisan support and passed the Senate without opposition in December. And it again provides the extended time dealers using LIFO need to replace their new-car inventories that were decimated due to uncontrollable pandemic-and supply chain shortfalls. NADA urges Congress to pass this technical and noncontroversial legislation as soon as possible to help the auto industry continue its recovery from drastic inventory shortfalls resulting from the pandemic and semiconductor shortage,” said Mike Stanton, President and CEO of the National Automobile Dealers Association (NADA).

Last Congress, this legislation had 174 cosponsors, including 59 in the Senate, and was passed by the Senate in December 2022. The Supply Chain Disruptions Relief Act introduced in the House this week by Reps. Arrington and Kildee matches that of last year’s legislation.