On Jan. 31, the U.S. House of Representatives passed HR 7024, the Tax Relief for American Families and Workers Act of 2024, by a vote of 357-70. It will now move on to the U.S. Senate.
The bill, introduced by House Ways and Means Committee Chairman Jason Smith, R-MO, and Senate Finance Committee Chairman Ron Wyden, D-OR, aims to alleviate financial strains faced by independent repair shops, grappling with rapid technological advancements and an evolving automotive landscape, as they will need to continue to invest in facility and equipment upgrades, some of which may require taking on debt.
This tax proposal would:
- Reclassify interest paid on certain business loans as allowable deductions.
Provide for a 100% bonus depreciation allowance for qualified property---such as equipment and vehicles---acquired and placed in service between Dec. 31, 2022, and Jan. 1, 2026.
Raise the maximum amount a business may expense for qualifying property from $1 million (reduced by the amount by which the cost exceeds $2.5 million) to $1.29 million (reduced by the amount by which the cost exceeds $3.22 million), adjusting for inflation for taxable years after 2024.
One provision in the framework of significant consequence to many repair business’ employees is the expansion to the Child Tax Credit. The bill would:
- Change how the maximum refundable credit is calculated by including consideration for the number of children in a household.
Increase the maximum per-child limit from $1,600 to $1,800 for tax year 2023, along with annual increases to the cap adjusted for inflation each ensuing year through 2025.
The Automotive Service Association (ASA) applauded and expressed its gratitude to the U.S. House of Representatives for passing H.R. 7024.
“Advancing the Tax Relief for American Families and Workers Act closer to enactment is a huge win for independent automotive repairers. The U.S. House of Representatives sent a strong message, through yesterday’s vote, that small businesses---like those represented by ASA---deserve a chance to thrive," said Bob Redding, ASA's Washington, D.C., representative. "H.R. 7024 helps make that vision possible. Many thanks to U.S. House Ways and Means Chairman Jason Smith for his leadership in putting this package together. ASA eagerly awaits the Senate’s consideration and passage of this bill so that it may ultimately receive the president’s signature.”
