WASHINGTON, D.C., May 19, 2025 – The United States House of Representatives’ Ways and Means Committee passed its long-awaited legislation that would rewrite the federal tax code. The Automotive Service Association (ASA) applauds House Continuing Resolution 14’s (H. Con. Res. 14) inclusion – in the version approved by the committee – of several provisions that will strengthen small businesses. The vast majority of auto repair shops and ASA’s members are small independent businesses.

Since 2017, businesses registered as sole proprietorships, S corporations, or partnerships have been able to deduct 20 percent of qualified income for tax purposes. This deduction, known as the Section 199A deduction, will expire at the end of 2025 if Congress doesn’t act. Not only would H. Con. Res. 14 make the Section 199A deduction permanent, but it would also raise the deduction to 23 percent. Additionally, the legislation would permanently cap the top marginal income tax rate at 37 percent for all income earned over $609,350.

Many auto repair shops, like small businesses in other industries, struggle to stay afloat due to challenging economic circumstances. If signed into law, these provisions would provide independent auto repairers much-needed economic certainty and make it easier to thrive.

H. Con. Res. 14 would also eliminate nearly all tax credits on purchases of electric vehicles (EV) and significantly scale back EV production incentives. Auto repairers depend on a steady market to make long-term investments that allow them to provide the best possible repair service, meet their obligations to their employees, and remain profitable. EV tax credits pose a threat to these businesses because they are not prepared for their facilities to become suddenly flooded with EVs, which require different facility configurations, tools, training, and other costly adjustments. Allowing the market to dictate consumers’ choices would put repairers in a better position to adapt to new vehicle technologies.

As stated previously, many shops will have to spend significantly on new equipment, machinery, tools, and other costly investments in order to adapt to new vehicle technologies. This bill would mitigate those costs by allowing small businesses to deduct 100 percent of investments in certain machinery and equipment for the tax year of the expenditure, thereby avoiding depreciation. This provision would provide independent repairers much needed financial relief that will facilitate long-term viability of the business.

ASA has heard from many of its members who have described challenges in creating a succession plan. Modifications to the estate tax in this bill could provide some relief. The bill would increase the threshold at which estates and lifetime gifts are taxed by $1 million.

Other provisions that could benefit independent repairers indirectly include:

• Eliminating taxes employees must pay on overtime pay for 2025-28
• Making the $2,000 Child Tax Credit permanent and making it $2,500 for 2025-2028
• Allowing car owners who make less than $100,000/year to deduct up to $10,000 in car loan interest payments for 2025-28
• Increasing the standard deduction by $1,000
• Making permanent the tax credit for small businesses that provide Paid Family and Medical Leave in states where businesses are not required to provide such leave
• Making permanent the tax credit for small businesses that provide financial support for employees’ childcare

ASA, as part of coalitions, encouraged Members of Congress to include many of these provisions in their tax legislation. We thank Congress for listening to ASA’s members.

ASA is the largest and oldest national organization committed to protecting the automotive repair industry with ONE VOICE. We are the only trade association whose board is comprised solely by collision and mechanical automotive repairers. Our members own and operate repair facilities responsible for the majority of all, post warranty, repair services in the United States. ASA advocates for the interests of its members and their customers in Washington, D.C. The education, resources, and services ASA provides empowers its members in all 50 states to remain trusted stewards of mobility in their communities. www.ASAShop.org