TIA Signs Onto Group Credit Sales Letter to Congress - Tire Review Magazine

TIA Signs Onto Group Credit Sales Letter to Congress

TIA members request Congress pass a temporary legislative modification to account for the suddenly high volume of customer defaults on credit sales.

The Tire Industry Association has signed onto a letter urging members of Congress to prioritize legislation that would take into account the suddenly high volume of customers defaults on credit sales.

TIA members request Congress pass a temporary legislative modification to account for this event. The full text of the letter is below:

Dear Speaker Pelosi, Leader McConnell, Leader Schumer, and Leader McCarthy,

Thank you for your leadership in swiftly working to respond to the economic damage caused by the coronavirus crisis through several pieces of legislation over the last several weeks.

As Congress continues to consider legislation in response to the crisis, we write to respectfully encourage you to prioritize legislation that would take into account the suddenly high volume of customer defaults on credit sales. Numerous industries often extend significant inventory sales or manufacturing inputs to customers on credit by convention, custom and sometimes even regulation.

Many customers buy inventory or input materials on short-term credit terms, particularly business in the industries hit hardest by the COVID-19 crisis, like restaurants, retailers, and venues for sport, events and entertainment. Current law does not contemplate the abrupt and unexpected halt in a high volume of payments for these credit sales all at once.

Over a broader period of time, section 166 of the tax code addresses this situation by allowing a deduction for wholly worthless debts or “bad debts.” However, the terms and timing of this provision allow it to be used only under certain circumstances – businesses must meet a nuanced facts-and-circumstances test that may take many years and in some cases may not be satisfied until a customer in default has reached a bankruptcy settlement.

Given the current public health and economic crisis, the value of this provision is severely limited in the event of the sort of sudden shock businesses face right now. Businesses selling inventory goods and input materials on credit are experiencing mounting defaults, and they will continue to experience defaults for months to come.

The undersigned businesses respectfully request that Congress pass a temporary legislative modification to account for this unforeseen event by loosening the facts-and-circumstances test on bad debt business deductions and accelerating these deductions into the present taxable year.

Sincerely,

The Tire Industry Association and others

You May Also Like

Apollo Tyres Opens Digital Innovation Center in India

In partnership with the Telangana Government, Apollo Tyres announced the launch of a digital innovation centre in Hyderabad, India.

In partnership with the Telangana Government, Apollo Tyres announced the launch of a digital innovation center in Hyderabad, India. The Memorandum of Understanding (MoU) signing and exchange occurred after a meeting between the two parties during the ongoing World Economic Forum at Davos. This is the second digital innovation center for Apollo Tyres, with the first one being in London.

MEMA Announces New Structure and Brand

The realignment will allow the association to better serve members and prepare for the future of mobility.

restructure
RNR Tire Express Named to Entrepreneur’s Franchise 500 List

The RNR team is celebrating 10-plus years being named to the Franchise 500 list.

‘New Culture,’ Dealer Commitment to Fuel Nexen Tire’s Growth

Hear what Nexen Tire executives have to say about the tire industry, supply chain and what dealers can expect from the company this year.

Nexen-Tire-John-Hagan-exec-VP-Sales
Magna Tyres Brings Latest OTR Tire Range to ConExpo Show

The latest OTR tire products will be displayed on the Magna Tyres stand.

Other Posts

ALI Announces Digital Lifting Points Guide

ALI is offering a digital lifting points guide that covers vehicles from model years 2000 through 2023.

Goodyear and Gatik Demonstrate Goodyear SightLine Technology

Goodyear and Gatik demonstrated, in a proof of concept, intelligent tires powered by Goodyear SightLine technology.

Chapel Hill Tire Gives Back Through 12 Days of Kindness Initiative

Discounts, charity and giving back was how Chapel Hill Tire celebrated the holidays.

TIA, MOHR Host Virtual Retail Tire Store Leadership Training Class

TIA said the upcoming vRTSL course aims to develop the interpersonal skills retail managers need to create connections.

TIA-Training