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November 17, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
House Tax Bill Passes with 100% Floor Plan Deductibility
Last Day to Get $100 Registration Discount for NADA Show in Las Vegas
U.S. Stands Alone as NAFTA Talks Resume
Trump Considers Naming Mulvaney Interim CFPB Director
China Craves Electric Cars, While U.S. Flirts With Ending Tax Credit
VW Is Said to Budget $85 Billion for Five-Year Spending Plan
Los Angeles Auto Show Events Include NADA / J.D. Power Conference LA on Nov. 28
Top Stories
House Tax Bill Passes with 100% Floor Plan Deductibility

Senate Bill Still Limits Floor Plan Interest – Contacts with Republican Senators Urgently Needed

Yesterday, the House of Representatives passed H.R.1, the Tax Cuts and Jobs Act, which included an NADA-backed amendment to preserve 100 percent deductibility of interest on floor plan loans, the top priority for NADA in the tax reform bill. The Senate Finance Committee, however, approved its version of the tax bill and kept the provision which limits the deductibility of interest, including floor plan interest, to 30 percent of adjustable taxable income. As interest rates increase, this proposal may result in dealers paying higher taxes even when a dealership does not show a profit.

Please call your Republican Senator ASAP. Negotiations between Senators on the final bill text have already begun. Senators need to hear directly from you about how limiting the deductibility of interest would increase your taxes and harm your business.

NADA has been urging the Senate to adopt the House tax bill language, H.R. 1, which preserves floor plan interest deductibility.  Floor plan financing should remain fully deductible in the Senate tax bill because:
  • The business interest provision unfairly puts small businesses with high cost inventory at serious risk of dealers paying higher taxes even when the dealership does not show a profit.  Floor plan financing is a specialized loan that helps provide affordable vehicle funding, and limiting its deductibility would disproportionately harm small-business dealers by substantially raising financing costs.

  • The bill treats dealers, generally closely held small businesses, the same as large corporations that choose debt over equity for tax purposes.  Franchised automobile dealers do not have access to equity markets and floor plan financing is a necessity, not a choice.

  • The bill as written is extremely damaging to small businesses and needs to be corrected to allow full deductibility of specialized loans such as floor plan loans.  The House tax reform bill (H.R. 1), recognizing that floor plan loans are different, limits business interest deductibility, but preserves full deductibility of floor plan financing for high cost inventory such as vehicles, farm equipment, etc.

Action Needed Now

The Senate is still revising its tax reform bill and is scheduled to consider the bill on the Senate floor as soon as November 27. Senate floor action is critical to preserving the full deductibility of floor plan loans since there may not be opportunities to change the bill after the Senate vote. NADA is urging dealers to contact their Republican Senators to let them know the Senate must add the House bill language which preserves floor plan interest deductibility.

Or click here to be connected with your Senator directly.


For more information or to provide Senate feedback, contact Patrick Calpin, NADA Legislative Affairs, at 202.547.5500.
Source: NADA

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Last Day to Get $100 Registration Discount for NADA Show in Las Vegas

The upcoming NADA Show in Las Vegas is an experience you can't get anywhere else.

The four-day NADA Show 2018 (formerly the NADA Convention & Expo) runs from Thursday, March 22, to Sunday, March 25, in Las Vegas. NADA member dealers and managers who register by Friday, Nov. 17 will receive a $100 early-bird registration discount from the onsite rate.

Here's what you'll experience at NADA Show 2018:

It's the final week for dealers and managers to receive the early-bird $100 registration discount. Rooms at the most popular hotels are filling up quickly. Six hotels in Las Vegas are already sold out. For more details or to register, click here.
Source: NADA

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U.S. Stands Alone as NAFTA Talks Resume

In the eyes of many trade observers, President Donald Trump’s “America First” slogan has become “America Alone.” The president has followed through on campaign pledges to withdraw from controversial trade deals like the Trans-Pacific Partnership. And he has made strident demands in talks with Canada and Mexico over tweaks to the North American Free Trade Agreement that appear to have imperiled the entire deal.
Source: The Detroit News

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Trump Considers Naming Mulvaney Interim CFPB Director

Mick Mulvaney once called the Consumer Financial Protection Bureau “a sad, sick joke.” Now, he may get to oversee Elizabeth Warren’s favorite regulator. Mulvaney, President Donald Trump’s Office of Management and Budget director, is being considered for a temporary role as interim director of the consumer watchdog after Richard Cordray steps down later this month, according to two people familiar with the matter. Mulvaney would be expected to name someone else or a team of people to run the CFPB on a day-to-day-basis so he could keep his focus on OMB, said one of the people.
Source: Bloomberg

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China Craves Electric Cars, While U.S. Flirts With Ending Tax Credit

GUANGZHOU, China — In the United States, politicians voted on Thursday for a proposal that included repeal of a $7,500 tax credit for buyers of electric cars. In China, auto executives from around the world were gathering to talk about ambitious plans to sell more of those vehicles here. The politics in Washington have not explicitly pushed carmakers to prioritize China. But the dueling approaches have added to a growing consensus among auto executives — even in the United States, where General Motors and Ford are planning to build more electric vehicles — that China will lead the world in the fast-growing sector.
Source: The New York Times

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VW Is Said to Budget $85 Billion for Five-Year Spending Plan

Volkswagen AG is discussing a $85 billion, five-year investment plan that would considerably increase the carmaker’s commitment to electric vehicles, according to people familiar with the matter. Spending in other areas has been reined in as the world’s biggest carmaker seeks to reduce capital expenditure to 6 percent of sales, said the people, who asked not to be identified because the plan isn’t public. Volkswagen’s supervisory board is discussing the rolling five-year plan at a meeting on Friday and an announcement could come later in the day, they said.
Source: Bloomberg

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AutoConference LA -- Nov. 28
Los Angeles Auto Show Events Include NADA / J.D. Power Conference LA on Nov. 28

Tom Doll, president and chief operating officer for Subaru of America, Anders Gustafsson, Volvo Cars USA’s new president and CEO and senior vice president for the Americas, and Jeremy Tucker, vice president of marketing communications and media for Nissan North America, are among the industry speakers at AutoConference LA on Tuesday, Nov. 28, 2017.

AutoConference LA, hosted by NADA and J.D. Power, will be held at the InterContinental Los Angeles Downtown, the tallest U.S. building west of Chicago. The half-day conference precedes media days at the Los Angeles Auto Show.

Other speakers include Mark Scarpelli, NADA chairman, Finbarr O’Neill, CEO and president of J.D. Power, as well as a panel discussion the future of autonomous vehicles and an analysis on auto retailing in the California market.

The conference starts with a noon luncheon and ends with a networking reception on the 73rd floor of the hotel, which offers unparalleled views of the cityscape and skyline of downtown Los Angeles. For the complete agenda or to register, visit www.autoconferencela.com.
Source: NADA

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Quotable
"The Senate tax bill may result in some dealers paying higher taxes even when a dealership does not show a profit. Dealers need to call their Republican Senators today to fix the problem their bill is creating."

    -- Doug Knust, NADA Legislative Affairs Committee Chairman, Nov. 17

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