The American International Automobile Dealers Association (AIADA) lauded House passage

June 6 of H.R. 2143, the Permanent Death Tax Repeal Act.

The House of Representatives voted 256-171 to

permanently extend the repeal established in the 10-year, $1.35 trillion tax-cut package enacted last year. The 2001 legislation gradually would reduce the tax, which hits farmers and family businesses as well as rich

people, and would eliminate it altogether in 2010. But due to a quirk in Senate budget rules, repeal only lasts for one year, until 2011.

"Permanent repeal of the death tax and the elimination of the sunset provision in the law remains AIADA's top legislative priority," said AIADA President Walter Huizenga. "We urge the Senate to also take action on this issue as soon as possible and put the final nail in the coffin of the federal death tax."

Senate debate on the legislation is expected to begin by June 28.

AIADA represents America's 10,000 automobile dealerships that sell and service international nameplate brands. Many of these businesses are family-owned, and could be devastated by the death tax, according to AIADA.

More than 600 AIADA members from across the United States descended on Capitol Hill on May 22 to participate in the association's Automotive Congress, the largest legislative conference in the industry, and urge Congress to permanently repeal the death tax.

An AIADA-supported landmark tax relief package enacted on June 7, 2001 included broad-based income tax cuts for individual businesses and the elimination of the death tax over a 10-year period. However, due to Congressional budget rules, all of the tax cuts in the new law will "sunset" in 2010. Thus, the death tax will be reinstated only one year after it is repealed.

"The temporary nature of the death tax repeal provisions has created numerous problems and uncertainty for family-owned businesses," AIADA said in a statement.

According to the Wall Street Journal, the politically contentious bill faces long odds in the Senate, where Democrats are mobilizing behind a less comprehensive plan.

House Democrats backed a proposal to create a $3 million exemption as of Jan. 1, 2003, while freezing existing estate-tax rates.

One Senate Democratic plan now circulating would continue to tax only the 0.1 percent of estates that exceed $4 million. "That would take care of over 99.9% of the people I represent," said Louisiana Sen. John Breaux, one of 12 Senate Democrats who supported

last year's tax cuts. The Senate is expected to vote on the matter before the July 4 recess.

At least four of the 62 senators who backed the 2001 tax cuts have declared publicly that they oppose permanently repealing the estate tax. The measure will need at least 60 votes to overcome expected procedural challenges.