As the American Car Rental Association prepares for its annual legislative event in September, it can take one recurring issue off the table: The 100% full expensing and bonus depreciation for rental vehicles and assets.

That deduction was recently restored and made permanent, allowing businesses to fully expense these investments in the year they are placed in service. The measure passed as part of the One Big Beautiful Bill (OBBB), signed July 4.

Promoting Industry Interests

At ACRA’s legislative conferences in the last few years, participants had lobbied to restore the temporary version passed under the 2017 Tax Cuts and Jobs Act (TCJA). Starting in 2022, full expensing/depreciation was scheduled to phase out in 20% annual increments and sunset entirely after Dec. 31, 2026.

“The difference for operators is night and day,” ACRA chairman Sharky Laguana said in a recent interview “If you are running an LLC car rental company with pass-through taxes, and have a growing business, to the extent you are buying more than selling, this puts you in a position to defer taxes into perpetuity.”

Taxes can be substantial and garner a high revenue share, especially for small to midsize rental fleet operations with revenues of $10 million. “You could be making $5 million in asset purchases, where you would have to pay taxes on income that generates $5 million without full expensing at a pass-through rate of 45%. That’s $225,500. It’s not uncommon for a rental car operation to earn 2% to 5% [profit] margins. If you must pay that out, with 3%, or $300,000, how are you funding growth if you give so much to the government?” Laguana asked.

“Without expensing, you are paying money to stay in business, with expensing, you have cash to keep your head above the water.”

The recent question over whether Congress would restore full expensing/bonus depreciation is just one example of the regulations and legislative acts that can affect the fortunes of the rental car industry. But just as one measure provides relief, others emerge that must be tracked or countered.

At this year’s ACRA D.C. Conference, now renamed the Performance and Policy Conference, industry leaders will meet Sept. 14-16 to prioritize the following matters, as outlined by ACRA president and CEO Don Lefeve:

Defending The Graves Amendment

One top priority is protecting ACRA’s signature accomplishment, the Graves Amendment, which has done more to spare the industry excessive costs than any other legislation in recent decades.

“This is the cornerstone of the car rental industry,” Lefeve said. “It prohibits rental car and lease companies from being held liable for the acts of their [car] renters. 

That is known as vicarious liability. We cannot be vicariously liable for the acts of renters.”

Although no legislation is pressing in Congress, some states are seeing government attempts to work around the Graves Amendment, while others are the site of court cases aimed to erode the legislation. 

“Our position is because it is so important to the rental car industry, it should not be touched, addressed, or opened up. If you open it up, you will have a redo of the fight we had in 2005. It creates less certainty for the industry.”

Vehicle Data Access

Another pursuit is vehicle data access.

“Our members are getting charged by OEMs to access a car’s data - the very data they are providing,” Lefeve said. “When you buy a car -- it’s your keys, it’s your data. You should have access to it. When you buy a house, the previous owner does not retain an interest in that house…so why is a car any different? To be clear, we are not trying to prevent OEMs from having access to the data, because they need it for safety reasons and to ensure products are operating as intended. But when an OEM sells you a car, that’s the owners’ data and we believe we should not be charged to access our data.”

ACRA would like to see legislation emerge that promotes vehicle data access without getting charged for it, he added.

Renewing The Highway Bill

ACRA is also focused on the Highway Bill (Surface Transportation Reauthorization), which starts this fall. The bill means that the House and Senate will determine all surface transportation policy, regulations, and funding decisions for the next five years.

The multi-year reauthorizations provide states with the long-term certainty they need to plan and execute many important surface transportation infrastructure projects, according to the website of House Committee On Transportation & Infrastructure, chaired by Rep. Sam Graves, R-Missouri. He is also the namesake of the Graves Amendment.

The committee website reports: The most recent surface transportation reauthorization was included in the much broader Infrastructure Investments and Jobs Act (IIJA); it expires on Sept. 30, 2026. One of the Transportation and Infrastructure Committee’s main priorities for the 119th Congress is passing the next bipartisan, multi-year surface transportation reauthorization before the current law expires. In January 2025, the Committee began holding hearings to examine different aspects of our highway, transit, and rail transportation programs and ensure that committee members gather information in preparation for the development of this legislation."

Rental Car Operators Add Support

Laguana and Lefeve both underscored how the annual conference relies on the support of rental car operators running all types of rental operations and with varying length of experience. The conference is open to all ACRA members. 

The event is divided into two parts: Day 1 on Sept. 15 features sessions focused on how to run better operations. Long-tenured operators will share expertise and education on improving operations, tracking business metrics, legal developments, and other topics.

“We will also look at when is the best time to sell a vehicle,” Lefeve said. “Copart will give their perspective on the best time to sell a car, how you can make more money and cut expenses to remain profitable. Controlling costs and how to do it through fleet maintenance is a huge issue,” with many operators not tracking such expenses as they should, he added.

Vendor panels from different sectors will share best practices and how operators can benefit from being good partners.

Day 2 will be the actual legislative and lobbying day. Teams of ACRA leaders and members will make rounds at Congressional offices in the Senate and House office buildings to meet with legislators and/or their staff representatives. An ACRA PAC fund-raising event in the early evening will finish the day.

“ACRA’s position is we’re in the business of advocating for our members,” Laguana said. “We follow the lead of our members in terms of what they want us to push for and advocate.”