This week, the House Ways & Means Committee advanced a major tax package through reconciliation, marking a critical step toward enacting long-sought pro-growth business tax reforms. The markup included several provisions that the American Car Rental Association (ACRA) and its coalition partners have championed, especially those that benefit capital-intensive businesses like the car rental industry.
Key Provisions for ACRA Members
1. Full Expensing / Bonus Depreciation Restored Through 2026
The bill restores 100% bonus depreciation through the end of 2026. This provision allows businesses to immediately deduct the full cost of qualified property, such as rental vehicles, in the year they are placed into service—rather than depreciating the cost over several years.
This is a top priority for ACRA. The phase-out of bonus depreciation, which began in 2023, has significantly increased the after-tax cost of fleet acquisition. Restoring full expensing is a critical liquidity tool for fleet operators and a powerful incentive for reinvestment and economic growth.
2. Fix to Section 163(j): EBITDA Standard Reinstated
The bill also corrects a harmful change to Section 163(j) by returning the interest deductibility cap to 30% of EBITDA (earnings before interest, taxes, depreciation, and amortization) instead of EBIT (excluding depreciation and amortization). This fix would be retroactive to tax year 2022.
For capital-intensive sectors like ours, which rely heavily on financing for vehicle fleets and facility infrastructure, this change will meaningfully reduce the cost of capital and support long-term investment.
ACRA’s Advocacy and Industry Impact
ACRA, alongside national business coalitions like the National Association of Manufacturers (NAM) and the Restore American Investment Now (RAIN) Coalition, has consistently advocated for these reforms. We recently signed onto letters urging Congress to fully restore both bonus depreciation and EBITDA-based interest deductibility.
With the committee vote now complete, the reconciliation bill heads to the full House Budget Committee.
What’s Next?
ACRA will continue to advocate aggressively for these provisions and others that benefit the car rental industry. We urge members to stay engaged, share your stories about how bonus depreciation and Section 163(j) affect your business, and be ready to contact your representatives as the bill moves through Congress.
For questions or to get involved, please contact ACRA’s government affairs team.