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November 28, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
NADA Chairman Mark Scarpelli Urges Dealers to Take Immediate Action to Protect Floor Plan Financing
Steve Daines Second Republican to Say He's a 'No' on Tax Bill
U.S. Auto Sales Pace Expected to Remain Strong in November
Auto Chiefs Air Concerns About Trumpís NAFTA Stance at White House
GM Offering 'Flex Cash' Incentives
OSHA Delays Injury and Illness Electronic Reporting Deadline By Two Weeks
NADA Show 2018 Announces Schedule for Educational Workshops
Top Stories
NADA Chairman Mark Scarpelli Urges Dealers to Take Immediate Action to Protect Floor Plan Financing

Senate Small Business Exemption on Business Interest Would Not Provide Relief for Small Business Auto Dealers

Yesterday, NADA Chairman Mark Scarpelli sent a letter urging dealers to contact their Senators and explain how limiting deductibility for floor plan financing would hurt most small businesses dealers by raising their taxes – especially when they do not show a profit. Senators are still making changes to the legislation. The Senate Budget Committee will vote on the bill today before the whole Senate considers the bill beginning as soon as tomorrow. Dealers are urged to immediately contact their Republican Senators to ask Senate leadership to include the House provision which would ensure that full floor plan interest deductibility is retained.

The Senate Finance Committee approved the “Tax Cuts and Jobs Act” which includes a provision that would reduce the current 100% deduction of business interest, including floor plan interest, to 30% of adjusted taxable income (the floor plan interest cap would NOT reflect any reductions for floor plan assistance).

The Senate bill has a small business exemption for businesses with an average annual gross receipts under $15 million from rules that limit interest deductibility.  However, while most dealers are small businesses, this “small business” exemption would not provide relief for the majority of dealers.

Dealers need to explain to their Senator(s) that most dealerships are family-owned small businesses with an average of 69 employees, and that the average dealership has gross receipts of approximately $60 million annually, which greatly exceeds the $15 million gross revenue test for the exclusion under the Senate bill.  Dealers have high average gross receipts not because they are large businesses, but because of the high retail price of the products they sell -- the average selling price of a new vehicle is approximately $35,000.

The Senate should include the language in the House tax reform bill, H.R. 1, that recognizes the importance of preserving interest deductibility for floor plan financing, because limiting this type of business interest would disproportionately hurt small business auto, boat, RV and motorcycle retailers, particularly during an economic downturn.

Click here for the one-pager. Click here for the list of Senate Republican phone numbers.
Source: NADA

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Steve Daines Second Republican to Say He's a 'No' on Tax Bill

A second Republican announced Monday that he would vote against the Senate version of the tax bill, underscoring the difficulty GOP leaders face this week in trying rounding up 50 votes for the bill. Sen. Steve Daines of Montana said he opposes the bill as written because of its provisions relating to small businesses, an aide said. Although the bill contains a special tax cut for those businesses, Daines said it is not big enough and that it would place those companies at a disadvantage to the C-corporations that would get a 20 percent tax rate under the legislation.

Sen. Ron Johnson of Wisconsin opposes the bill for the same reason, although he has said that he is encouraged by the efforts of the Trump administration and Senate GOP leadership to work toward allaying his concerns.
Source: Washington Examiner

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U.S. Auto Sales Pace Expected to Remain Strong in November

Automakers are projected to report strong U.S. sales for November as aggressive incentive spending continues to sustain a robust autumn. Forecasts from J.D. Power/LMC Automotive, Kelley Blue Book and Edmunds call for a seasonally adjusted, annualized selling rate ranging from 17.1 million to 17.8 million, which would represent a drop-off from the rates topping 18 million that were posted in September and October.
Source: Automotive News

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Auto Chiefs Air Concerns About Trumpís NAFTA Stance at White House

Top executives from Detroit automakers met Monday with Vice President Mike Pence and other administration officials and aired their concerns about changes the Trump administration is seeking to the North American Free Trade Agreement. Trump has pushed for companies to construct more auto assembly plants in the U.S., while also pushing for major changes to Nafta that the automakers oppose. U.S. negotiators have proposed significant changes to the so-called rules of origin for autos in a bid to ensure more U.S.-made parts are used in vehicles assembled in North America, a change that the auto industry has warned could undercut Trump’s America-first goals.
Source: Bloomberg

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GM Offering 'Flex Cash' Incentives

General Motors is offering a new incentive program to Chevrolet dealers that some argue resembles controversial stair-step incentive programs and gives unfair advantages to larger retailers. The national program awards dealers a package of "flex cash" based on sales from the previous month, according to documents obtained by Automotive News. Dealers can use the cash to discount nearly any 2017 or 2018 vehicle. ... National Automobile Dealers Association Chairman Mark Scarpelli ... last month said programs that create opaque or inconsistent pricing — he emphasized stair-step incentive programs — could have a long-term adverse effect on consumer loyalty and brand health.
Source: Automotive News

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OSHA Delays Injury and Illness Electronic Reporting Deadline By Two Weeks

Dealerships required to electronically file 2016 employee workplace injury and illness records with the Occupational Safety and Health Administration (OSHA) now have until Dec. 15, 2017, to do so.  Those required to electronically file Form 300A or equivalent include:

  • Commercial truck dealerships with 20 to 249 employees at a single "establishment," defined as "a single location where business is conducted or where services or industrial operations are performed."
  • Light-duty and commercial truck dealerships with 250 or more employees at a single establishment.

Dealerships required to electronically file a 2016 Form 300A should do so using OSHA's Injury Tracking Application (ITA). NADA/ATD recommends against filing until on or about December 15, 2017, as it is possible that the deadline will be extended again. 

Light-duty dealerships with fewer than 250 employees at a single establishment must record workplace injuries and illnesses, but are not required to electronically submit Form 300A to OSHA. Also, since the OSHA-approved State Plan states of California, Maryland, Minnesota, South Carolina, Utah, Washington and Wyoming have yet to adopt the Form 300A electronic reporting mandate, all dealerships in those states need not file using the ITA.

For more information on OSHA's injury and illness recordkeeping and reporting mandates, visit NADA's injury and illness record keeping page or contact NADA Regulatory Affairs at regulatoryaffairs@nada.org.
Source: NADA

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NADA Show News
NADA Show 2018 Announces Schedule for Educational Workshops

At NADA Show’s workshops and idea sharing sessions, attendees get to the heart of current issues and trends in the areas of employee recruiting and retention, fixed operations (parts and service), variable operations (sales), digital and traditional marketing, legal and regulatory issues and more. Dealers, managers, consultants and other experts come together to work towards actionable solutions to the challenges dealers face each day.

Here's the full schedule of workshops and educational sessions at NADA Show 2018 next March. With more than 100 educational sessions scheduled, you’ll want to take the time to look over the schedule and plan accordingly. Workshops can be searched by track, date, topic and speaker in the advanced search feature.
Source: NADA Blog

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Quotable
"The Senate tax reform bill rushing through Congress must be fixed. Limits on the deduction of business interest, including floor plan interest, would hike taxes for many small business dealers. Senators must keep floor plan interest fully deductible."

    -- NADA Chairman Mark Scarpelli in a letter to dealers across the country urging them to contact their Senators, Nov. 27 

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