Dollar Thrifty Explains Impact of Recently Passed Tax Legislation

Dollar Thrifty Automotive Group Inc. provided Monday an update on the expected financial impact to the Company of The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (otherwise known as H.R. 4853 or "The Tax Relief Act").

Dollar Thrifty noted its previous disclosures stated that based on a number of factors, material cash payments for U.S. federal income taxes could be required in 2011. As a result of the passage of the Tax Relief Act, the company revised its expectations for future federal income tax payments.    

Under the Tax Relief Act, Dollar Thrifty will have the ability to deduct for federal income tax purposes up to 100 percent of the cost of rental vehicles placed in service from Sept. 9, 2010 through Dec. 31, 2011, as well as 50 percent of the cost of vehicles placed in service in 2012. As a result of this accelerated depreciation, the company now expects that it will not make significant cash payments for federal income taxes in 2011.

In addition, Dollar Thrifty noted that it currently has refundable federal income tax overpayments for the 2010 tax year totaling approximately $33 million. The company expects to fully recover these overpayments in 2011 either as an offset to any potential federal income taxes payable, or through tax refunds. The combination of these factors will favorably impact the company's 2011 cash flow from operations, liquidity and overall cash position.

"The Tax Relief Act will have a material impact on Dollar Thrifty's near term cash flows, and will further strengthen the company's liquidity," said Scott Thompson, president and CEO of Dollar Thrifty.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

 
 

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

6 Takeaways from the 2018 International Car Rental Show

Technological solutions are finally moving from reality to theory, peer-to-peer platforms are being redefined, China has the biggest room for growth, while Sixt’s U.S. aspirations have only just begun.

The Irony of Customer Service in the Digital Age

Sure, any company would jump at the chance to use technology to reduce labor costs. But it also comes with some big, red, flashing warning lights.

Market Forces Driving Car Rental in 2018

An analysis of the conference calls of Avis Budget Group and Hertz Global Holdings reveal trends and initiatives involving fleet right sizing, pricing, ancillary revenue opportunities, and renting to ride-hailing drivers.

Job Finder: Access Top Talent. Fill Key Positions.

>