Congress quietly revives tax deduction for car loans—but only domestic vehicles
H.R. 2981 — USA CAR Act · Filed by David Taylor (R-OH) · Introduced Apr 21, 2025 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill allows taxpayers to deduct interest paid on car loans, but only for vehicles manufactured in the United States with final assembly completed domestically. The deduction applies to loans taken out on or after January 1, 2025, and is secured by the vehicle itself. Domestic automakers and their buyers benefit; foreign manufacturers and their U.S. buyers do not.
Why we flagged it
The bill's operative mechanism is a tax deduction for interest on loans for U.S.-assembled vehicles only. This is a targeted tax expenditure (foregone revenue) that subsidizes domestic auto purchases and manufacturing by making them cheaper relative to foreign alternatives.
What the text implies
- The deduction may disproportionately benefit higher-income taxpayers who finance larger vehicles and have higher marginal tax rates, concentrating the subsidy upward.
- Foreign automakers with U.S. plants (e.g., Toyota, Honda, BMW) may qualify if final assembly occurs in the U.S., creating a loophole that partially undermines the domestic-preference intent.
- The deduction reduces federal tax revenue without an offsetting appropriation, implicitly raising the deficit or requiring cuts elsewhere.
- Buyers of used vehicles are excluded (loans must be incurred on or after Jan 1, 2025, on newly acquired vehicles), limiting the benefit to new-car purchases.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Domestic car buyers gain a tax deduction, lowering their effective borrowing cost and incentivizing purchase of U.S.-made vehicles, which may support domestic manufacturing jobs. However, foreign car buyers lose the deduction they might otherwise claim, creating unequal tax treatment based on vehicle origin; the deduction also reduces federal tax revenue, shifting costs to other taxpayers or reducing public services.
Who stands to gain
- Domestic automakers (Ford, General Motors, Stellantis)
- Foreign automakers with U.S. assembly plants (Toyota, Honda, BMW, Volkswagen, etc.)
- Consumers financing new U.S.-assembled vehicles
- Dealers selling U.S.-assembled vehicles
Named in the bill
Internal Revenue Code Section 163(h), Automobile Information Disclosure Act Section 2, Ford Motor Company, General Motors, Stellantis, Toyota, Honda, BMW, Volkswagen
Where it stands
- Apr 21, 2025 — Introduced · Congress.gov: “Introduced in House”
- Apr 21, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Dec 2025 to Dec 2025. Those filings disclosed $3,150,000 in lobbying spend. A filing names 11 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 0% of bills with at least one filing.
David Taylor, the sponsor, reported $453,000 in PAC receipts in the 2026 cycle.
- General Motors Company — $3,150,000 on 1 filing
Lobbying Disclosure Act filings through Jan 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (1,835 characters) on Sep 7, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,398 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Dec 2025. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jan 20, 2026 · page rendered 2026-10-23.
“Congress quietly revives tax deduction for car loans—but only domestic vehicles” QuorumCivic. https://share.quorumcivic.app/bill/119/hr2981 Report an error
The week in bills
One email, Sunday: what Congress passed, what it changed, and who paid.
One link arrives to confirm the address. It is used for this email and nothing else, and every issue carries an unsubscribe link.