Reps. Linda Sánchez and Todd Young Introduce Bill To Spur Charitable Car Donations
Washington, D.C. — On Tuesday, Representatives Linda Sánchez (D-CA) and Todd Young (R-IN) introduced legislation to address a steep decline in charitable vehicle donations that is negatively impacting non-profits across the country.
"Today, charities and organizations are struggling to meet the needs of our communities with fewer resources and staff to carry out their missions,” said Rep. Linda Sánchez. “By making this simple change to the charitable automobile donation process, the CARS Act will make it easier for people to donate their cars to charities that provide these critical services. I am proud to work alongside Congressman Young to help bring this legislation to fruition and stand committed to ensuring it is enacted."
Up until 2005, it was easy for individuals to donate a vehicle and deduct the entire fair market value of the car from their taxable income if the amount was under $5,000.
However, a change to the tax law in 2005 created a delay between the time of donation and a donor’s ability to claim the deduction for the contribution. This lag has resulted in an 83.1% decline in the volume of car donations nationally since 2004, according to the latest IRS data.
“Thousands of charities rely on the donation of cars as a key fundraising tool,” said Rep. Todd Young. “This is especially true for smaller organizations like churches or local food banks. Our bill makes a simple change to spur these donations after years of decline, in the hope we can restore a critical resource charities use to make a difference in their communities. I’m grateful to Congresswoman Sánchez for helping me introduce the CARS Act and am pleased it has garnered bipartisan support amongst our colleagues.”
The CARS Act would allow donors who wish to claim a deduction amount between $500 and $2,500, the opportunity to do so provided 1) they obtain a valuation from an authorized online valuation service (such as Kelley Blue Book), and 2) the receiving charity verifies the physical condition of the vehicle.
To view the full text of the legislation, click here.