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To amend the Internal Revenue Code of 1986 to allow a deduction for qualified automobile interest.
Summary
This bill amends the Internal Revenue Code to allow individual taxpayers to deduct interest paid on loans used to purchase automobiles that are manufactured and finally assembled in the United States. The deduction applies only to automobile loans incurred on or after January 1, 2025, and is allowed as an above-the-line deduction, meaning taxpayers can claim it without itemizing their deductions. The bill defines a "qualified automobile" as a vehicle manufactured with final assembly occurring within the United States, and the deduction is limited to interest on loans secured by such automobiles. The provision becomes effective for interest paid or accrued on indebtedness incurred after the bill's enactment date.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Sen. Moreno, Bernie [R-OH] (R-OH)
Actions (2)
- May 7, 2025 Read twice and referred to the Committee on Finance. · senate
- May 7, 2025 Introduced in Senate
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE SENATE OF THE UNITED STATES
May 7, 2025
Mr. Moreno introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for qualified automobile interest.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “United States Automobile Consumer Assistance and Relief Act” or the “USA CAR Act”.
SEC. 2. DEDUCTION FOR QUALIFIED AUTOMOBILE INTEREST.
(a) In General.—Section 163(h)(2) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting “, and”, and by adding at the end the following new subparagraph:
“(G) any qualified automobile interest (as defined in paragraph (5)).”.
(b) Qualified Automobile Interest.—Section 163(h) is amended by adding at the end the following new paragraph:
“(5) Qualified automobile interest.—For purposes of this subsection—
“(A) In general.—The term ‘qualified automobile interest’ means any interest which is paid or accrued during the taxable year on indebtedness which—
“(i) is incurred on or after January 1, 2025,
“(ii) is incurred in acquiring a qualified automobile, and
“(iii) is secured by such automobile.
“(B) Qualified automobile.—
“(i) In general.—The term ‘qualified automobile’ means an automobile (within the mean of section 2 of the Automobile Information Disclosure Act (15 U.S.C. 1231)) which is made by a manufacturer (within the meaning of section 2 of such Act) the final assembly of which occurs within the United States.
“(ii) Final assembly.—The term ‘final assembly’ means the process by which a manufacturer produced an automobile at, or through the use of, a plant, factory, or other place from which the automobile is delivered to a dealer with all component parts necessary for the mechanical operation of the automobile included with the automobile, whether or not the component parts are permanently installed in or on the automobile.”.
(c) Deduction Allowed Above-the-Line.—Section 62(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph
(21) the following new paragraph:
“(22) In the case of a taxpayer other than a corporation, so much of the deduction allowed under section 163 which is attributable to qualified automobile interest (as defined in section 163(h)(5)).”.
(d) Effective Date.—The amendments made by this section shall apply to amounts paid or accrued on indebtedness incurred on or after the date of the enactment of this Act. <all>
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