A bipartisan bill introduced this week in the House of Representatives would extend full floor plan financing interest deductions to semi-trailer dealers, addressing what industry advocates call an unfair tax disadvantage that has strained cash flow for local dealerships across the country.
Representatives Blake Moore, a Republican from Utah, and Norma Torres, a Democrat from California, introduced H.R. 7944, the Semi-Trailer Tax Parity Act, on March 18, 2026. The legislation would amend federal tax code to include truck trailers, semi-trailer chassis, and semi-trailer bodies in the definition of motor vehicle solely for purposes of floor plan financing deductions.
Under current law, semi-trailer dealers face a competitive disadvantage compared to automobile and recreational vehicle dealerships. While auto and RV dealers can fully deduct interest paid on floor plan financing, semi-trailer dealers remain subject to the 30 percent cap on business interest deductions established under Section 163(j) of the Internal Revenue Code.
The disparity stems from modifications made to the tax code in 2018 through the Bipartisan Budget Act. Congress carved out exemptions for motor vehicles, recreational trailers, and campers, recognizing that dealerships rely heavily on inventory financing and face unique cash flow challenges. Semi-trailers were left out of that exemption despite operating under similar business models.
“Our federal tax code should support small businesses and incentivize reinvestment,” Moore said in a statement. “Semi-trailers are essential to nearly every sector of the economy, transporting everything from consumer goods to life-saving medicines. This legislation ensures semi-trailer dealers receive the same tax treatment as other vehicle dealerships.”
The 30 percent limitation on business interest deductions was enacted as part of the 2017 Tax Cuts and Jobs Act. The cap applies to adjusted taxable income, with any excess interest eligible for carryforward to future tax years. Floor plan financing received special treatment because dealerships typically maintain large inventories financed through revolving credit lines secured by the vehicles themselves.
For auto dealers, the exemption has translated to significant tax savings, often running into millions of dollars annually for larger operations. Semi-trailer dealers, by contrast, absorb the capped deduction costs even during low-margin years, according to industry representatives.
Torres emphasized the regional and national importance of the semi-trailer industry. “Semi-trailers are critical to moving goods throughout the Inland Empire and across the country,” she said. “Yet these dealerships face unequal tax treatment, creating financial strain and limiting options for customers. I’m proud to co-lead this effort to ensure fairness nationwide.”
The Inland Empire region of Southern California, which Torres represents, serves as a major logistics hub for goods moving through West Coast ports. The area has seen significant growth in warehousing and distribution operations, making trailer availability and dealer viability particularly important to the regional economy.
The National Trailer Dealers Association has been pushing for this legislative fix for years. Gwendolyn Brown, the association’s president, called the bill “common-sense legislation” that supports locally owned dealerships. Paul Christenson, president of North American Trailer, noted that the existing tax structure creates financial burdens for dealerships even in unprofitable years.
Floor plan financing typically covers 80 to 90 percent of dealer inventory in the trucking sector. Dealers pay interest on this financing tied to their sales cycles—the faster inventory turns over, the less interest accumulates. The inability to fully deduct that interest puts semi-trailer dealers at a disadvantage when competing for customers and managing thin profit margins.
The NTDA’s Commercial Advocacy PAC credited member outreach for building momentum behind the bill. Dealers contacted lawmakers through phone calls, letters, and in-person meetings to explain how the tax disparity affects their operations. The association is now urging members to maintain engagement with their representatives to push the legislation toward passage.
The bill would amend the tax code definition of motor vehicle only within the context of Section 163(j). Semi-trailers would not be reclassified as motor vehicles for other regulatory or legal purposes. This narrow approach aims to address the specific tax issue without creating unintended consequences in other areas of law.
If enacted, the legislation would allow semi-trailer dealers to fully deduct floor plan interest expenses from their federal taxes. This change could reduce tax liability by thousands of dollars per inventory cycle for individual dealerships, improving cash flow and enabling reinvestment in operations. The savings would be particularly meaningful for smaller, locally owned operations that lack the financial cushion of larger corporate dealerships.
Moore has sponsored several other bills during the current congressional session, including legislation related to commodity exchange regulations and comprehensive budget reform. His focus on economic and regulatory issues aligns with the Semi-Trailer Tax Parity Act’s goal of leveling the playing field for small businesses.
According to Federal Election Commission filings from the fourth quarter of 2026, Moore raised $218,300 during the period, with 47.7 percent coming from individual contributions. He spent $187,400 and had $2.2 million in cash on hand. His estimated net worth as of March 18, 2026, stood at $9.7 million.
Election spending in Utah’s 1st Congressional District, which Moore represents, totaled $4.5 million over the past two years, including $23,000 from political action committees. The district is rated as solidly Democratic for the 2026 election cycle.
For the legislation to advance, it would need to clear the House Ways and Means Committee, which has jurisdiction over tax matters. The bill would then require approval from the full House before moving to the Senate. Bipartisan support in the current political environment remains challenging, though the co-sponsorship by a Republican and Democrat signals potential for cross-aisle cooperation on what both lawmakers frame as a fairness issue.
Dealership owners and industry groups can track the bill’s progress through Congress.gov. The NTDA is encouraging members to contact their representatives to express support and explain how the current tax structure affects their businesses. Effective advocacy often includes specific examples of how the 30 percent cap impacts operations, such as reduced ability to expand inventory or hire additional staff.
If the bill does not pass, semi-trailer dealers will continue operating under the existing limitation. The status quo means ongoing cash flow challenges and competitive disadvantages relative to other vehicle dealerships. Some dealers may need to adjust their business models, potentially carrying less inventory or seeking alternative financing arrangements that could increase costs.
The legislation does not include retroactive provisions, meaning any tax benefits would apply only to future tax years after enactment. Dealers should prepare tax strategies that account for both scenarios—passage and non-passage—to optimize their financial planning.
Customer impact could include more stable pricing and better inventory availability if dealers gain financial flexibility through the tax change. Supply chain participants who rely on trailer availability may also benefit from healthier dealer operations. Industry watchers can monitor developments through NTDA communications and congressional updates as the bill moves through the legislative process.
Source: New bill seeks to extend floor plan financing for trailer dealers | TPS