I 
111TH CONGRESS 
2D SESSION 
H. R. 4897 
To amend the Internal Revenue Code of 1986 to allow a deduction for 
interest paid on indebtedness incurred in connection with the purchase 
of a new automobile or light truck. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 21, 2010 
Ms. RICHARDSON introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
deduction for interest paid on indebtedness incurred in 
connection with the purchase of a new automobile or 
light truck. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Drivers Accelerated 
Interest Deductibility Act of 2010’’ or the ‘‘Drivers AID 
Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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(1) The economic health and well-being of the 
United States depends on a strong and resurgent 
automotive industry. Until 2008, automotive sales 
historically accounted for approximately 20 percent 
of all retail spending in the United States, and pro-
vided the income and financial security for millions 
of Americans. 
(2) From June 2006 through May 2008, the 
seasonally adjusted annual rate of automotive sales 
ranged from a high of approximately 17,500,000 
units in June 2006 to a low of 14,200,000 units in 
May 2008, substantially above the 13,000,000 unit 
seasonally adjusted annual rate generally regarded 
to be the indicator of a robust automotive industry. 
(3) Beginning in June 2008 and continuing 
through the present, the seasonally adjusted annual 
rate of automotive sales has averaged less than 
10,000,000 units and has exceeded that number in 
only three months and has not in any matched or 
exceeded the 13,000,000 unit seasonally adjusted 
annual rate threshold. 
(4) The annual contributions of the automotive 
new vehicle dealers industry to the national economy 
are substantial. In 2008, the average sales revenue 
for the approximately 20,000 new automobile dealers 
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in the United States was $28,800,000 and the total 
sales of all new-vehicle dealerships in the United 
States was $576,000,000,000 which constituted 14.6 
percent of total retail sales in the United States. 
(5) In 2008, the 1,057,500 persons employed in 
new-vehicle dealerships in the United States, an av-
erage of 53 employees per dealership, earned on av-
erage $48,963 per year, generating a national pay-
roll of more than $52,000,000,000 and $2,660,000 
per dealership and millions more in tax revenue for 
State and local governments. 
(6) Because a well capitalized, financially sound 
dealer network is essential to the success of every 
automobile manufacturer, especially a manufacturer 
facing economic challenges, preserving the viability 
of the new-vehicle dealer industry further the na-
tional economic interest of the United States. 
(7) Because sales of new vehicles is highly de-
pendent on consumer confidence and the existence of 
incentives to motivate consumers to purchase a new- 
vehicle, a reduction in the cost of capital needed to 
finance the purchase of a new vehicle over a period 
of years will have a positive effect on the viability of 
the new-vehicle dealer industry, which in turn will 
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strengthen the automotive manufacturing industry 
and the national economy. 
(8) Payment of nonmortgage interest payments, 
such as automobile loan debt, was deductible for 
Federal income tax purposes for 73 years, from the 
inception of the Internal Revenue Code in 1913 until 
Congress ended the deduction in 1986 when the Tax 
Reform Act of 1986 was passed. 
SEC. 3. DEDUCTION FOR INTEREST ON INDEBTEDNESS IN-
CURRED TO ACQUIRE A PASSENGER CAR OR 
LIGHT TRUCK. 
(a) IN GENERAL.—Paragraph (2) of section 163(h) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘and’’ at the end of subparagraph (E), by striking 
the period at the end of subparagraph (F) and inserting 
‘‘, and’’, and by adding at the end the following new sub-
paragraph: 
‘‘(G) in the case of the acquisition of a 
qualified vehicle, any qualified vehicle interest 
if, for the calendar quarter preceding the date 
on which such vehicle is acquired, the average 
national unemployment rate for such quarter is 
not less than 7 percent.’’. 
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(b) QUALIFIED VEHICLE INTEREST.—Paragraph (5) 
of section 163(h) of the Internal Revenue Code of 1986 
is amended to read as follows: 
‘‘(5) QUALIFIED VEHICLE INTEREST.—For pur-
poses of paragraph (2)(G) and this paragraph— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
vehicle interest’ means any interest which— 
‘‘(i) is properly chargeable on indebt-
edness incurred in acquiring a qualified ve-
hicle, and 
‘‘(ii) is properly allocable to the 36- 
month period described in subparagraph 
(B)(ii). 
‘‘(B) LIMITATIONS.— 
‘‘(i) 
DOLLAR
LIMITATION.—The 
amount of interest taken into account 
under this paragraph (after the application 
of subparagraph (A)(ii)) with respect to a 
qualified vehicle shall not exceed $5,000. 
‘‘(ii) PERIOD
LIMITATION.—Only in-
terest on such indebtedness properly allo-
cable to the 36-month period beginning on 
the date such indebtedness is incurred may 
be taken into account under this para-
graph. 
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‘‘(C) QUALIFIED VEHICLE.— 
‘‘(i) IN GENERAL.—The term ‘quali-
fied vehicle’ means a motor vehicle— 
‘‘(I) the original use of which 
commences with the taxpayer, 
‘‘(II) which is acquired for use by 
the taxpayer and not for resale, 
‘‘(III) with respect to which no 
payment is made under section 1302 
of the Consumer Assistance to Recycle 
and Save Act of 2009, 
‘‘(IV) which is made by a manu-
facturer, 
‘‘(V) which is treated as a motor 
vehicle for purposes of title II of the 
Clean Air Act, 
‘‘(VI) which has a gross vehicle 
weight rating of 6,000 pounds or less, 
and 
‘‘(VII) which is a passenger auto-
mobile or light truck. 
‘‘(ii) MOTOR
VEHICLE.—The term 
‘motor vehicle’ means any vehicle which is 
manufactured primarily for use on public 
streets, roads, and highways (not including 
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a vehicle operated exclusively on a rail or 
rails) and which has at least 4 wheels. 
‘‘(iii) OTHER
TERMS.—The terms 
‘automobile’, ‘passenger automobile’, ‘light 
truck’, and ‘manufacturer’ have the mean-
ings given such terms in regulations pre-
scribed by the Administrator of the Envi-
ronmental Protection Agency for purposes 
of the administration of title II of the 
Clean Air Act (42 U.S.C. 7521 et seq.). 
‘‘(D) AVERAGE NATIONAL UNEMPLOYMENT 
RATE.—The average national unemployment 
rate for a calendar quarter means the national 
unemployment rate means the average of the 
monthly national unemployment rates for 
months in the calendar quarter, as reported by 
the Bureau of Labor Statistics, Department of 
Labor.’’. 
(c) DEDUCTION ALLOWED IN COMPUTING ADJUSTED 
GROSS INCOME.—Subsection (a) of section 62 of such 
Code is amended by inserting before the last sentence the 
following new paragraph: 
‘‘(22) QUALIFIED
VEHICLE
INTEREST.—The 
deduction allowed by reason of section 163(h)(5).’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to vehicles acquired 
on or after January 1, 2008. 
Æ 
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