The Automotive Service Association supports House Continuing Resolution 14’s inclusion – in the version approved by the House of Representatives Ways and Means Committee – of several provisions that will strengthen small businesses, according to a news release. 

Most auto repair shops and ASA’s members are small independent businesses. Since 2017, businesses registered as sole proprietorships, S corporations, or partnerships can deduct 20% of qualified income for tax purposes. This deduction, known as the Section 199A deduction, will expire at the end of 2025 if Congress doesn’t act. H. Con. Res. 14 would make Section 199A deduction permanent and raise the deduction to 23%. Additionally, the legislation would permanently cap the top marginal income tax rate at 37% for all income earned over $609,350. 

Many auto repair shops, like small businesses in other industries, struggle to stay afloat due to challenging economic circumstances. If signed into law, these provisions would provide independent auto repairers with much-needed economic certainty. 

H. Con. Res. 14 would also eliminate nearly all tax credits on purchases of electric vehicles and significantly scale back EV production incentives. Auto repairers depend on a steady market to make long-term investments that allow them to provide the best possible repair service, meet their obligations to their employees, and remain profitable.

EV tax credits pose a threat to these businesses because they are not prepared for their facilities to become suddenly flooded with EVs, which require different facility configurations, tools, training, and other costly adjustments. Allowing the market to dictate consumers’ choices would put repairers in a better position to adapt to new vehicle technologies. 

Many shops will have to spend significantly on new equipment, machinery, tools, and other costly investments to adapt to new vehicle technologies. The current bill would help mitigate costs by allowing small businesses to deduct 100% of investments in certain machinery and equipment for the tax year of the expenditure, thereby avoiding depreciation. This provision would provide independent repairers with much needed financial relief that will facilitate the long-term viability of the business. 

ASA members have described challenges in creating a succession plan. Modifications to the estate tax in this bill could provide some relief. The bill would increase the threshold at which estates and lifetime gifts are taxed by $1 million. 

Other provisions that could benefit independent repairers indirectly include: 

• Making permanent the tax credit for small businesses that provide financial support for employees’ childcare 

ASA encourages Congress to include many of these provisions in its tax legislation and thanks Congress for listening to ASA’s members.