Max Baucus: “I am proud to support Senator Bingaman's legislation to ensure equitable tax treatment for Oldsmobile dealers impacted…”

“I am proud to support Senator Bingaman's legislation to ensure equitable tax treatment for Oldsmobile dealers impacted by General Motors' sudden decision to eliminate the Oldsmobile from its product line. General Motors did agree to partially compensate Oldsmobile dealers for their loss. Senator Bingaman's bill ensures that like-kind exchange treatment, which defers the gain on the exchange of business or investment property until it is ultimately sold, is also available for motor vehicle dealers who receive payments when the brand of automobile they carry is eliminated by the manufacturer. The proposal allows such reinvested payments to be treated as a like-kind exchange of property if exchanged within 2 years from receipt of the payments, thus deferring the tax consequences. As such, the proposal encourages capital investment by recognizing that a longer period of time is required for dealers to obtain a new franchise or establish a new car sales business. The manufacturer, not the automobile dealer, makes the unilateral decision to eliminate vehicle brands. Nonetheless, the dealer is the one who invests years of hard work in bringing a particular brand to his or her local community. When a manufacturer decides to eliminate a brand, many family-owned dealerships face a complete loss of business as well as an increased threat to the viability of other brands located in the same facility.”