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November 20, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Call Your Senator to Preserve Deductibility of Floor Plan Interest in Tax Reform Bill
From Las Vegas to Washington D.C., Lobbyists Swarm U.S. Congress on Tax Bill
Mexico, Canada Shun U.S. Demands for Higher Auto Content Under NAFTA
Two-Thirds of U.S. Vehicles With Takata Air Bags Still Not Fixed
U.S. Probes 415,000 Volkswagen Vehicles for Air Bag Problems
Promoting Industry Careers, NYC Car Dealers Open Their Doors to Local Students
Los Angeles Auto Show Events Include NADA / J.D. Power Conference LA on Nov. 28
Top Stories
Call Your Senator to Preserve Deductibility of Floor Plan Interest in Tax Reform Bill


It's imperative that we as a community of auto dealers and dealership employees take collective action to educate lawmakers regarding a major threat to dealerships that is included in the current version of the Senate tax bill.

As currently written, the Senate's tax bill would limit the deductibility of business interest, including floor plan interest, to 30 percent of adjusted taxable income. As interest rates increase, this would result in dealers paying higher taxes even when a dealership does not show a profit. This is a tax increase for your business and could be especially devastating to cash flow, particularly to many of our smaller members, during an economic downturn.

The Senate tax reform bill is still being drafted and could be voted on as early as the week of 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 urges dealers to contact their Republican Senator to ask them to add the House bill language that preserves full floor plan deductibility.

Click here to contact your Senator(s) directly. You can view a list of target lawmakers here and a one-pager on this topic here.

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

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From Las Vegas to Washington D.C., Lobbyists Swarm U.S. Congress on Tax Bill

Republicans in the House of Representatives wanted to jettison a part of the tax code that lets dealers of RVs, cars, boats, even farm and construction machinery, write off all the interest expense of keeping inventories of vehicles on their sales lots.

The RV dealers jumped on the phones to their representatives in Washington, adding to a wave of calls made by members of the powerful National Automobile Dealers Association (NADA) as well lobbyists for boat dealers and farm machinery dealers…

By the end of the day, the crisis had passed, at least temporarily. The House had backed away from repealing the tax deduction for what dealers call floor-plan interest expense, or the financing costs they incur for vehicles on their lots, but they must still convince the Senate.

NADA, which represents more than 16,000 dealers nationwide, plans to send a letter on Monday to Senate Republican leaders, saying the group will not support a tax bill lacking the House language.

“The Senate business interest provision unfairly puts small businesses with high cost inventory at serious risk of paying higher taxes even when a business does not show a profit. NADA respectfully urges the Senate to include the language of H.R. 1, so that floor plan interest remains fully deductibility,” said the letter from NADA President Peter Welch reviewed by Reuters.

Source: Reuters

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Mexico, Canada Shun U.S. Demands for Higher Auto Content Under NAFTA

Divisions over updating the NAFTA trade deal showed no sign of easing on Sunday as Mexico and Canada signaled they would not offer counterproposals to U.S. demands for far stronger automotive content rules, people with knowledge of the talks said.

The lack of movement on major issues such as car and light-truck rules of origin could put the North American Free Trade Agreement negotiations in danger of grinding to a stalemate as an early 2018 deadline for revising the pact approaches.

A source close to the negotiations said Mexico had serious problems with a number of U.S. proposals, including Washington's demand that regional content for light vehicles be raised to 85 percent from 62.5 percent, with 50 percent coming from the United States.
Source: The Detroit News

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Two-Thirds of U.S. Vehicles With Takata Air Bags Still Not Fixed

Nearly two-thirds of the U.S. vehicles containing defective air bag inflators made by Takata Corp. remain unrepaired as automakers have made varying degrees of progress addressing the largest auto recall in U.S. history.

As of mid-September, 20 million vehicles containing defective Takata air bag inflators still haven’t been fixed, 64 percent of the 31.5 million vehicles containing the defective parts, according to a progress report released Friday by John Buretta, the independent monitor overseeing the recalls and a former U.S. prosecutor.
Source: Bloomberg

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U.S. Probes 415,000 Volkswagen Vehicles for Air Bag Problems

The U.S. National Highway Traffic Safety Administration said Friday it is opening an investigation into potential air bag failure in 415,000 Volkswagen vehicles after the German automaker issued a recall for the same issue in 2015.
Source: Reuters

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Promoting Industry Careers, NYC Car Dealers Open Their Doors to Local Students

In an effort to help young people find careers in the retail-auto industry, the Greater New York Automobile Dealers Association arranged for local high school students to experience the inner workings of new car dealerships. Last week, students from Thomas Edison Education High School in New York City toured Helms Bros' Mercedes, exploring each department and learning about the many career opportunities available.
Source: GNYADA

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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 business interest provision unfairly puts small businesses with high cost inventory at serious risk of paying higher taxes even when a business does not show a profit. NADA respectfully urges the Senate to include the language of H.R. 1, so that floor plan interest remains fully deductible.”

    -- NADA President Peter Welch, Nov. 19

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