NADA DIRECTOR’S MESSAGE NADA Notes MATT LAUGHRIDGE DIRECTOR, NADA President Donald Trump signed into law the “One Big Beautiful Bill Act” (H.R. 1) on July 4. For NADA members, the passage of the bill represents another significant victory this year, as many of NADA’s tax priorities were addressed. Among the provisions included are: • Pass Through Deduction (Section 199A): Makes permanent at 20%. Also expands the deduction limit phase-in range by increasing the $50,000 (non-joint returns) and $100,000 (joint returns) amounts to $75,000 and $150,000, respectively. Effective for taxable years beginning after Dec. 31, 2025. • Estate Tax: Makes permanent and increases the exemption to $15 million (individual)/$30 million (joint), and adjusts for inflation annually thereafter. Effective for estates of decedents after Dec. 31, 2025, and gifts made after Dec. 31, 2025. • Interest Deduction Limitations (Section 163(j)): Reverts to EBITDA permanently for taxable years ‘‘beginning after Dec. 31, 2024.” • Bonus Depreciation (Section 168(k)): Permanently restores and extends 100% bonus depreciation for property acquired and placed in service on or after Jan. 19, 2025. Other relevant provisions: • New EV Credit (Section 30D): Eliminated after Sept. 30, 2025, for consumers who purchase certain new EVs. (The law does not include the exemption for manufacturers who sold less than 200,000 EVs, which was included in a previous version of the bill.) • Leasing and Commercial EV Credit (Section 45W): Eliminated after Sept. 30, 2025. • Used EV Credit (Section 25E): Eliminated after Sept. 30, 2025. • Temporary Auto Loan Deductibility: Above the line deduction on auto loan interest for new vehicles. $10,000 cap and MAGI limits of $100,000 (individual)/$200,000 (joint). Vehicle must be final assembled in the U.S. Deduction available from 2025-28. • Income Tax Rates: Permanently extends modified income tax rates. The provision also adds an additional year of inflation adjustment to the income tax thresholds to which the 10%, 12% and 22% brackets apply. Effective for taxable years beginning after Dec. 31, 2025. • SALT — Business/PTET: The 2017 Tax Cuts and Jobs Act created a $10,000 cap on the amount of state and local taxes (SALT) that could be deducted from a taxpayer’s federal taxable income. Some states created a workaround for the SALT cap by allowing pass-through businesses to deduct certain state and local taxes at the entity level, known as the pass-through entity tax (PTET). While prior versions of H.R. 1 would have limited the SALT workarounds, NADA successfully fought to preserve PTET. • SALT — Individual Cap: Increases SALT cap deduction to $40,000, for 2025, with 1% annual increases through 2029. Reverts to $10,000 in 2030. Deduction phases down with income over $500,000. • Expense Deduction (Section 179(b)): Permanently increases to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million. Effective for property placed in service for taxable years beginning after Dec. 31, 2024. • Clean Heavy-Duty Vehicles (IRA Section 60101): The Inflation Reduction Act established a program to grant awards for purchasing heavy-duty electric vehicles. The bill repeals the program and rescinds any unobligated balance. Effective on the date of enactment. • CAFE Rule: Reduces NHTSA’s Corporate Average Fuel Economy (CAFE) penalty for automakers not meeting the standards to $0, effective on the date of enactment. THE GENERATOR 10
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