Everyone is scrambling to see how the new tax law will impact their personal financial lives and businesses, large and small, are doing the same thing. So far it seems that the new law will benefit businesses, and auto dealership owners in particular are going to be pleased.
- I believe the economic growth from the tax bill will positively impact dealership businesses value overtime!
- The estate changes will further reduce dealer gift and estate taxes with effective planning.
The tax reform bill will lower taxes on many businesses, as promised. Your accountant or tax attorney may offer advice on what the changes will mean to your particular situation.
Interestingly an unintended consequence of the Tax Bill’s original form would have meant higher taxes for most dealers. That’s because the bill imposed new limits on the interest payments businesses can write off, capping any deduction at 30% of a company’s income.
Automobile Dealer Tax Law
Dealers pay a lot more in interest than many other businesses because they use floor plan debt to finance vehicle inventory purchases. Fortunately dealers won a change in the bill that makes these auto dealer loans exempt from the bill’s new interest deduction cap. The final details of the law are still being interpreted because the ink is barely dry.
Kirk Kleckner is a seasoned dealership expert that is also a CPA, MBA and accredited in business valuation Because auto dealerships are so different in their financial and operational structure than most other businesses, it would be prudent to reach out and contact us if you have any concerns or needs relating to our dealership services in the areas of profitability enhancement, business valuation, succession planning and litigation financial analysis and expert opinions.
Call Kirk Kleckner at 612-294-8730 to set up a confidential consultation.