CAFE Penalty Relief The National Highway Traffic Safety Administration’s (NHTSA) Corporate Average Fuel Economy (CAFE) penalty for automakers not meeting standards is reduced to $0, effective immediately. WHY IT MATTERS These provisions deliver substantial benefits for auto dealers: • Financial Relief: Permanent deductions like Section 199A, bonus depreciation and expanded expense deductions reduce tax burdens, freeing up capital for reinvestment. • Estate Planning: Higher estate tax exemptions provide long-term security for family-owned dealerships. • Leveling the Playing Field: The elimination of EV credits and CAFE penalties reduces competitive pressures on traditional vehicle sales, while the temporary auto loan deduction incentivizes purchases of U.S.-assembled vehicles. • SALT Workaround Preservation: Maintaining the PTET workaround ensures dealers in high-tax states can maximize deductions. NADA’s advocacy was instrumental in shaping these outcomes, particularly in preserving the PTET and securing permanent tax relief tailored to dealers’ needs. LOOKING AHEAD H.R. 1 is a game-changer for auto dealers, offering immediate and long-term financial benefits. NADA remains committed to advocating for dealers as Congress tackles future legislation, including the highway reauthorization bill. For now, dealers can celebrate a hard-fought victory that strengthens their businesses and supports the broader automotive industry. This is another win for dealers in Washington, D.C. It is an honor to serve as your Mississippi NADA director. Please let me know if I can help you in any way. H.R. 1 is a game-changer for auto dealers, offering immediate and long-term financial benefits. “ 19
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