We are writing to express our concerns about a regulation that is being implemented by the Department of Social Services (DSS) for the Neighborhood Assistance Tax Credit Program, or NAP credits.

Our new car dealer members make donations of new vehicles to community organizations that can use this program to provide a tax credit to the dealer in return for their donation. The credits are provided for the actual cost of the vehicle to the dealer. The vehicles are then often raffled off by the community organizations as a fundraiser.

Under the proposed regulation, these organizations would no longer be able to provide a credit for the dealers' actual cost, but rather would be limited to a credit for the proceeds it receives for the vehicle. If dealers cannot recover credits for their actual cost of the donated vehicles, there will be no incentive to support the many community organizations that rely upon these donations from dealers.

The regulation states that it is intended to ensure a fair valuation of donated items. In the case of new vehicles, a dealer's cost is readily verifiable through both the dealer and independent sources that provide this information to vehicle purchasers.

At the very least, this regulation should make a distinction between new vehicles, the cost of which can be easily verified, and used vehicles, the cost of which is more widely varied.

We ask that this part of the regulation be withdrawn or revised to reflect our stated concerns. Thank you.