Chrysler's Special Tax ProvisionDecember 5, 2008 - by Donny Shaw
All this talk about bridge loans for the Big Three reminded me of a little something special Congress has already given to one of the car companies this year. As part of H.R.3221, the Housing and Economic Recovery Act of 2008 that was signed into law this summer, Congress approved a provision that allows corporations to claim additional R&D or AMT credits in 2008 in lieu of bonus depreciation for “eligible qualified property,” at a maximum benefit of $30 million.
Unlike Ford and GM, Chrysler wouldn’t be eligible for this tax incentive because they are not a corporation, but a partnership. So Congress cleverly added some language to the bill that would make Chrysler eligible without actually naming them.
>(A) APPLICABLE PARTNERSHIP — The term “applicable partnership” means a domestic partnership that —
>>(i) was formed effective on August 3, 2007, and
>>(ii) will produce in excess of 675,000 automobiles during the period beginning on January 1, 2008, and ending on June 30, 2008.
August 3, 2007 is that date that Chrsyler was bought out by Cerberus Capital Management.
Just an interesting tidbit buried deep in Congress’ actions this past year. It just goes to show that Congress has been thinking about ways to help the Big Three many months before the companies started pushing publicly for a bailout.