Full Expensing Coalition Launches
One of ACRA’s key federal public policy priorities for 2022 and 2023 is to extend the full expensing of personal property, including vehicles, beyond 2023 – when full expensing is scheduled to begin to sunset 20% each year under the 2017 tax reform law. Prior to 2017, some ACRA members used “like kind exchanges” to defer taxable gains when vehicles were sold – but LKEs for personal property were dropped in the 2017 law. In its place, car rental companies have been able to expense 100% of their vehicle purchases in Year 1, rather than depreciating the vehicles over time (typically 5 years).
But Congress didn’t make full expensing permanent in 2017. Due to budget constraints and the unique way Congress “scores” the cost of tax provisions, full expensing is due to decline to 80% for the 2023 tax year and 20% more each year thereafter. Clearly, such a sunset could hit the balance sheets of ACRA members hard.
ACRA is working with other key D.C. stakeholders, including the U.S. Chamber, the Business Roundtable, the National Association of Manufacturers, the Tax Foundation, and the Farmers Union to expand full expensing beyond 2023. ACRA and the tax treatment of members’ vehicles – and potentially other fleet associations that used LKE in the past – is a new frontier for groups that have pushed for full expensing in the past. As a result, these “traditional” full expensing groups are welcoming ACRA to the fight as car rental companies add political contacts and an alternative economic narrative to the full expensing debate that is coming on Capitol Hill.
A move to extend full expensing – perhaps not to make it permanent but to delay the start of the sunset – could occur as early as late 2022. But congressional action likely will happen in 2023 – because Congress generally doesn’t do very much far in advance on any policy topic!
Full expensing will be a key component of ACRA’s Annual D.C. Conference in September 2022 (see more information on registration below). Please take the time to put the Conference on your schedule and register to attend – full expensing is too important to leave it to others to make your case and the case of the entire car rental industry.
Expanded ACRA Annual D.C. Conference Announced
The ACRA Board is pleased to announce an expanded ACRA Annual D.C. Conference in 2022 that includes an extra day of educational sessions for both new and “experienced” ACRA members at the start of the traditional Government Affairs Conference. Below is a summary of the planned schedule for the 2022 Conference:
- Sunday, 9/18 – Attendees arrive D.C.; ACRA still working on a H.Q. hotel; attendees may be “on their own” for their hotels to provide attendees with maximum flexibility;
- Monday, 9/19 – ACRA “University” Day split into two “tracks” – (1) car rental 101 for new or almost new entrants into the industry; and, (2) graduate studies for more experienced operators with more complex challenges; location of University TBD; expect details in the near future; casual, hosted dinner on Monday evening for all attendees at location TBD;
- Tuesday, 9/20 – ACRA “Political College” Day on Capitol Hill; full day of presentations from legislators and staff, as well as stakeholders allied with and opposed to ACRA’s positions, on the policy issues of greatest importance to ACRA members; location will again be in the Capitol Visitors’ Center in the U.S. Capitol; ACRAPAC Reception with Senators and Representatives to follow for all 2022 ACRAPAC contributors; hosted dinner on Tuesday evening on the Hill for all attendees; and,
- Wednesday, 9/21 – ACRA “Day on the Hill”; attendees will divide into regional lobbying teams, guided by an experienced D.C. lobbyist, for a series of in-person meetings with legislators and their staff on the policy issues of importance to ACRA members – meetings with members of the House Ways and Means Committee on extending full expensing and members of the Senate Commerce Committee on electric vehicle infrastructure, autonomous vehicles and vehicle data access.
A draft schedule for the 2022 Conference is attached here (Draft 2022 ACRA D.C. Conference Schedule). To register for the 2022 Conference, please go to www.acraorg.com. Sign up early as attendance likely will be limited to the first 100 regular and associate member executives who sign up (we’ll start a waitlist if needed) due to space constraints in the Capitol Visitors Center. Don’t miss the 2022 Annual D.C. Conference with the expanded educational sessions!
Joint Letter Supporting Federal Catalytic Converter Bill
ACRA joined with an eclectic group of trade associations ranging from car dealers to law enforcement officials to push the leaders of the House Energy and Commerce Committee to consider legislation – H.R. 6394, which has been endorsed by ACRA – to clamp down on catalytic converter thefts and to throttle the secondary market in this stolen equipment. A copy of the letter is attached here (Joint CC Letter).
Joint Letter Urging Restraint on Revamp of Overtime Regulations
ACRA joined with a long list of associations cautioning the Department of Labor on another revamp of federal overtime regulations – regulations that were just revised during the last administration and revisions to which would be ill-timed given the current uncertain economic climate. A copy of the letter is attached here (Joint Overtime Letter).
State Legislative Activities
- California — ACRA credited, primarily due to efforts of ACRA President Sharky Laguana, with helping San Francisco District Attorney in busting an auto burglary ring operating in the greater S.F. area; hopefully, this success will lead to great liaison with law enforcement officials cracking down on these unlawful activities. Article is attached here (SF Article).
- New York – The industry continues to strongly support AB 9343 (Rep. Magnarelli) and S 8530 (Sen. Kennedy). This legislation would expressly permit rental car companies to separately state and recover costs associated with registering and titling vehicles. This is commonly referred to as VLF recovery. The Assembly bill has been voted out of the Consumer Affairs and Protection Committee and the industry is pushing for a vote before the full Assembly. Work continues on the Senate side as well. June will be a busy month on this issue.
- Massachusetts – The industry remains vigilant on any efforts to repeal the state sales tax exemption for rental car companies when purchasing vehicles exclusively for commercial purposes. You may recall, the industry faced a significant threat on this proposal several years ago. Efforts are still being made this legislative session to repeal the exemption – which would be the first state to implement such an exemption. The industry is engaged to make sure any repeal efforts are defeated.
ACRA Membership Activity
New Associate Members
- Flying Leap, Atlanta GA
New Regular Operator Members
- Autopreneur Club, Stockbridge, GA
- Leja Car Rental, Miami, FL
- Pacecar Entertainment Rental, Tallahassee, FL
- Rebushift, Houston, TX
Renewing Regular Operator Members
- Autoteam, Inc., South Amboy, NJ