The Automotive Service Association Supports Tax Benefits for Auto Shops in ‘One Big Beautiful Bill’

The Automotive Service Association said in a news release that it supports tax provisions that it believes will benefit independent auto repair shops and members of the ASA in the U.S. Senate version of the “One Big Beautiful Bill” that passed on July 1.

Since 2017, businesses registered as sole proprietorships, S corporations, or partnerships could deduct 20% of qualified income for tax purposes. The deduction, known as the Section 199A deduction, will expire at the end of 2025 without congressional action. The ASA said that the House’s version of the bill would make the deduction permanent and increase it to 23%. The Senate’s version would also make it permanent but keep it at 20%.

Many repair shops need to invest in new equipment, tools, and machinery to adapt to new vehicle technologies. The ASA said the bill would allow businesses to deduct 100% of investments in certain machinery and equipment for the tax year of the expenditure, thereby avoiding depreciation. However, the Senate’s version would make this depreciation provision permanent, while the House’s version would make this provision expire at the end of 2029.

The ASA said auto consumers stand to benefit as well. Individuals who purchase a car between now and the end of 2028 and report less than $100,000 in their tax filing can deduct up to $10,000 in car loan interest payments until the end of the 2028 tax filing year. The Senate’s version sets stricter qualifying requirements. Only new vehicles would qualify, and those vehicles must be assembled in the U.S.

Adapting to electric vehicle technology requires additional investments that many repair shops struggle to afford. The ASA said the bill would eliminate nearly all tax credits on consumer EV purchases, resulting in a more gradual increase of EVs on the road. It would also eliminate approximately 50% of EV manufacturing incentives. The House and Senate versions differ in that the Senate version would eliminate fewer EV manufacturing incentives. It would also phase out those incentives sooner than the House version’s timeframes.

The bill passed on a 51-50 vote with Vice President J.D. Vance breaking the tie. The U.S. House of Representatives must approve the Senate’s version before the bill can be sent to President Trump to sign. The U.S. House Rules Committee met on July 2 to move the bill for a vote before the full House.

The ASA said it prefers some provisions in the House version relative to the equivalent provision in the Senate bill, and vice versa, but overall supports the direction of the tax and EV policy provisions.