II 

118TH CONGRESS 

1ST SESSION S. 443 

To treat certain liquidations of new motor vehicle inventory as qualified 

liquidations of LIFO inventory for purposes of the Internal Revenue 

Code of 1986. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 15, 2023 

Mr. BROWN (for himself, Mr. SCOTT of South Carolina, Ms. BALDWIN, Mr. 

BLUMENTHAL, Mr. CARDIN, Mr. CARPER, Mr. COONS, Ms. CORTEZ

MASTO, Ms. DUCKWORTH, Mrs. FEINSTEIN, Ms. HASSAN, Mr. KELLY, 

Mr. KING, Ms. KLOBUCHAR, Mr. MANCHIN, Mrs. MURRAY, Mr. PADILLA, 

Mr. PETERS, Mrs. SHAHEEN, Ms. SMITH, Ms. STABENOW, Mr. TESTER, 

Mr. VAN HOLLEN, Mr. WARNOCK, Mr. BARRASSO, Mrs. BLACKBURN, 

Mr. BOOZMAN, Mr. BRAUN, Mrs. CAPITO, Mr. CASSIDY, Mr. CORNYN, 

Mr. CRAMER, Mr. CRAPO, Mr. DAINES, Mr. GRASSLEY, Mr. HAGERTY, 

Mr. HOEVEN, Mrs. HYDE-SMITH, Mr. JOHNSON, Mr. LANKFORD, Ms. 

LUMMIS, Mr. MARSHALL, Mr. MORAN, Mr. RISCH, Mr. ROUNDS, Mr. 

RUBIO, Mr. SCOTT of Florida, Mr. THUNE, Mr. TILLIS, and Mr. 

WICKER) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To treat certain liquidations of new motor vehicle inventory 

as qualified liquidations of LIFO inventory for purposes 

of the Internal Revenue Code of 1986. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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•S 443 IS

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Supply Chain Disrup3 tions Relief Act’’. 

4 SEC. 2. TREATMENT OF CERTAIN LIQUIDATIONS OF NEW 

5 MOTOR VEHICLE INVENTORY AS QUALIFIED 

6 LIQUIDATIONS OF LIFO INVENTORY. 

7 (a) IN GENERAL.—In the case of any dealer of new 

8 motor vehicles which inventories new motor vehicles under 

9 the LIFO method for any specified taxable year, the re10 quirements of paragraphs (1)(B) and (2) of section 473(c) 

11 of the Internal Revenue Code of 1986 shall be treated as 

12 satisfied with respect to such inventory for such taxable 

13 year. 

14 (b) ADDITIONAL RELIEF.— 

15 (1) IN GENERAL.—The Secretary shall, not 

16 later than the date which is 90 days after the date 

17 of the enactment of this Act, prescribe regulations or 

18 other guidance under which dealers of new motor ve19 hicles with a qualified liquidation (determined after 

20 application of subsection (a)) of new motor vehicles 

21 for any specified taxable year may elect— 

22 (A) to not recognize any income in the 

23 specified taxable year which is solely attrib24 utable to such qualified liquidation, and 

25 (B) to treat the replacement period with 

26 respect to such liquidation as being the period 


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•S 443 IS

1 beginning with the first taxable year after such 

2 specified taxable year and ending with the ear3 lier of— 

4 (i) the first taxable year after such 

5 liquidation with respect to which such deal6 er does not inventory new motor vehicles 

7 under the LIFO method, or 

8 (ii) the last taxable year ending before 

9 January 1, 2026. 

10 (2) FAILURE TO FULLY REPLACE LIQUIDATED

11 VEHICLES DURING REPLACEMENT PERIOD.—If, as of 

12 the close of the replacement period, the taxpayer has 

13 failed to replace all liquidated vehicles with respect 

14 to a qualified liquidation to which paragraph (1) ap15 plies, the taxpayer shall increase gross income for 

16 the last taxable year of the replacement period by 

17 the sum of— 

18 (A) the aggregate amount of income that 

19 would have been required to be recognized in 

20 the liquidation year had the taxpayer elected to 

21 apply the provisions of section 473 of the Inter22 nal Revenue Code of 1986 and not made the 

23 election in paragraph (1), plus 


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•S 443 IS

1 (B) interest thereon at the underpayment 

2 rate established under section 6621 of such 

3 Code. 

4 (3) ELECTIONS.— 

5 (A) IN GENERAL.—Except to the extent 

6 provided in subparagraph (B), an election 

7 under paragraph (1) with respect to any speci8 fied taxable year shall be made by the due date 

9 (including extensions) for filing the taxpayer’s 

10 return of tax for such taxable year and in such 

11 manner as the Secretary may prescribe. Once 

12 made, any such election shall be irrevocable. 

13 (B) CERTAIN ELECTIONS TREATED AS

14 CHANGE IN METHOD OF ACCOUNTING.—In the 

15 case of an election with respect to a specified 

16 taxable year for which the return of tax has al17 ready been filed before the date of the enact18 ment of this Act, any election under paragraph 

19 (1) for such specified taxable year may be made 

20 on the return of tax for the first taxable year 

21 ending after the date of the enactment of this 

22 Act and shall be treated for purposes of section 

23 481 of the Internal Revenue Code of 1986 as 

24 a change in method of accounting initiated by 


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•S 443 IS

1 the taxpayer and made with the consent of the 

2 Secretary. 

3 (c) DEFINITIONS.—For purposes of this section— 

4 (1) SPECIFIED TAXABLE YEAR.—The term 

5 ‘‘specified taxable year’’ means any liquidation year 

6 ending after March 12, 2020, and before January 1, 

7 2022. 

8 (2) NEW MOTOR VEHICLE.—The term ‘‘new 

9 motor vehicle’’ means a motor vehicle— 

10 (A) which is described in section 

11 163(j)(9)(C)(i) of the Internal Revenue Code of 

12 1986, and 

13 (B) the original use of which has not com14 menced. 

15 (3) SECRETARY.—The term ‘‘Secretary’’ means 

16 the Secretary of the Treasury or the Secretary’s del17 egate. 

18 (4) OTHER TERMS.—Except as otherwise pro19 vided in this section, terms used in this section 

20 which are also used in section 473 of the Internal 

21 Revenue Code of 1986 shall have the same meaning 

22 as when used in such section 473. 

Æ 


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