H.R. 3570: United States Automobile Consumer Assistance and Relief Act

The bill named the "United States Automobile Consumer Assistance and Relief Act" (or the USA CAR Act) proposes changes to the Internal Revenue Code related to automobile financing. The main features of the bill include:

1. Tax Deduction for Automobile Interest

The bill seeks to allow individuals to deduct certain interest payments on loans taken out to purchase automobiles. This deduction is specific to "qualified automobile interest," which the bill defines.

2. Definition of Qualified Automobile Interest

Under the proposed changes, "qualified automobile interest" is defined as interest that:

• Is paid or accrued during the taxable year on indebtedness that:
• Was incurred on or after January 1, 2025,
• Was incurred in acquiring a qualified automobile, and
• Is secured by that automobile.

3. Definition of Qualified Automobile

The bill also defines what constitutes a "qualified automobile." This term refers to any automobile that:

• Is defined within the parameters of the Automobile Information Disclosure Act, and
• Is manufactured by a company whose final assembly occurs within the United States.

4. Above-the-Line Deduction

The bill introduces the option for taxpayers (excluding corporations) to claim the deduction for qualified automobile interest as an "above-the-line" deduction. This means the deduction can reduce taxable income without the need to itemize deductions, potentially making it more beneficial for many taxpayers.

5. Effective Date

The provisions of the bill would apply to amounts paid or accrued on debt taken out for purchasing automobiles on or after the date the legislation is enacted.

Relevant Companies

• Ford Motor Company (F) - As a domestic automobile manufacturer, Ford may see an increased demand for its vehicles from consumers benefiting from the interest deduction.
• Toyota Motor Corporation (TM) - If manufactured and assembled in the U.S., Toyota models may qualify under the proposed rules, affecting consumer purchasing behavior.
• General Motors Company (GM) - Similar to Ford, GM could benefit from potential sales increases as buyers take advantage of the tax deduction for qualified financing of vehicles.