The Auto Care Association warned lawmakers that the proposed Border Adjustment Tax (BAT) on imports could significantly increase auto repair and maintenance costs.
The BAT imposes a new 20% tax on imported goods and services. This would result in an increase of $20 billion a year in taxes on automotive parts.
According to an analysis of the tax conducted by the Auto Care Association, this could equate to a $160 increase in annual auto repair and maintenance costs, to about $1,100 per year for the average U.S. family.
“The Border Adjustment Tax will drive up auto repair costs to about $1,100 per year for car owners,” said Bill Hanvey, president and CEO, Auto Care Association. “This is also a highly regressive tax that will hit working families the hardest because they tend to drive older vehicles that require more repair work and maintenance. The BAT will hurt middle class consumers and have a chilling effect on small businesses that conduct auto repair work and serve as a source of good-paying jobs in every community in the country. The Auto Care Association strongly urges Congress and the Trump Administration to reject this ill-conceived tax increase.”
The Auto Care Association is part of Americans for Affordable Products, a national coalition of 400 businesses and trade associations, that are opposing the BAT. In addition to the higher auto repair costs it would create, the BAT has been estimated to cost the average American family $1,700 per year in higher prices on everyday consumer items, such as gasoline, groceries, clothing, shoes and prescription medicines, the association said.