II 

117TH CONGRESS 

2D SESSION S. 4105 

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 

APRIL 28, 2022 

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

Mr. MARSHALL, Mrs. MURRAY, Ms. LUMMIS, Ms. STABENOW, and Mr. 

PORTMAN) 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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Supply Chain Disrup5 tions Relief Act’’. 


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•S 4105 IS

1 SEC. 2. TREATMENT OF CERTAIN LIQUIDATIONS OF NEW 

2 MOTOR VEHICLE INVENTORY AS QUALIFIED 

3 LIQUIDATIONS OF LIFO INVENTORY. 

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

5 motor vehicles which inventories new motor vehicles under 

6 the LIFO method for any specified taxable year, the re7 quirements of paragraphs (1)(B) and (2) of section 473(c) 

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

9 satisfied with respect to such inventory for such taxable 

10 year. 

11 (b) ADDITIONAL RELIEF.— 

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

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

14 of the enactment of this Act, prescribe regulations or 

15 other guidance under which dealers of new motor ve16 hicles with a qualified liquidation (determined after 

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

18 for any specified taxable year may elect— 

19 (A) to not recognize any income in the 

20 specified taxable year which is solely attrib21 utable to such qualified liquidation, and 

22 (B) to treat the replacement period with 

23 respect to such liquidation as being the period 

24 beginning with the first taxable year after such 

25 specified taxable year and ending with the ear26 lier of— 


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•S 4105 IS

1 (i) the first taxable year after such 

2 liquidation with respect to which such deal3 er does not inventory new motor vehicles 

4 under the LIFO method, or 

5 (ii) the last taxable year ending before 

6 January 1, 2026. 

7 (2) FAILURE TO FULLY REPLACE LIQUIDATED

8 VEHICLES DURING REPLACEMENT PERIOD.—If, as of 

9 the close of the replacement period, the taxpayer has 

10 failed to replace all liquidated vehicles with respect 

11 to a qualified liquidation to which paragraph (1) ap12 plies, the taxpayer shall increase gross income for 

13 the last taxable year of the replacement period by 

14 the sum of— 

15 (A) the aggregate amount of income that 

16 would have been required to be recognized in 

17 the liquidation year had the taxpayer elected to 

18 apply the provisions of section 473 of the Inter19 nal Revenue Code of 1986 and not made the 

20 election in paragraph (1), plus 

21 (B) interest thereon at the underpayment 

22 rate established under section 6621 of such 

23 Code. 

24 (3) ELECTIONS.— 


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•S 4105 IS

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

2 provided in subparagraph (B), an election 

3 under paragraph (1) with respect to any speci4 fied taxable year shall be made by the due date 

5 (including extensions) for filing the taxpayer’s 

6 return of tax for such taxable year and in such 

7 manner as the Secretary may prescribe. Once 

8 made, any such election shall be irrevocable. 

9 (B) CERTAIN ELECTIONS TREATED AS

10 CHANGE IN METHOD OF ACCOUNTING.—In the 

11 case of an election with respect to a specified 

12 taxable year for which the return of tax has al13 ready been filed before the date of the enact14 ment of this Act, any election under paragraph 

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

16 on the return of tax for the first taxable year 

17 ending after the date of the enactment of this 

18 Act and shall be treated for purposes of section 

19 481 of the Internal Revenue Code of 1986 as 

20 a change in method of accounting initiated by 

21 the taxpayer and made with the consent of the 

22 Secretary. 

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

24 (1) SPECIFIED TAXABLE YEAR.—The term 

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


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•S 4105 IS

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

2 2022. 

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

4 motor vehicle’’ means a motor vehicle— 

5 (A) which is described in section 

6 163(j)(9)(C)(i) of the Internal Revenue Code of 

7 1986, and 

8 (B) the original use of which has not com9 menced. 

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

11 the Secretary of the Treasury or the Secretary’s del12 egate. 

13 (4) OTHER TERMS.—Except as otherwise pro14 vided in this section, terms used in this section 

15 which are also used in section 473 of the Internal 

16 Revenue Code of 1986 shall have the same meaning 

17 as when used in such section 473. 

Æ 


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