NADA Headlines - 12/19/2017 (Plain Text Version)

View Graphical Version

Tax Reform Bill Means Opportunity and Success for Dealers

By Mark Scarpelli, December 2017

The nation's auto dealers should have a happy holiday season thanks to NADA's and my fellow dealers' efforts to ensure that our priorities were accounted for in comprehensive tax reform legislation. On Dec. 2, the Senate passed the "Tax Cuts and Jobs Act" (H.R. 1), which included a NADA-supported amendment to preserve 100-percent deductibility of floor plan loan interest. Thanks to a concerted effort by dealers all over the country, this critical provision was included in the legislation.

Preserving floor plan deductibility was one NADA's top priorities for tax reform. In the original Senate bill, the interest deductibility was slashed to 30 percent of adjusted taxable income, which would have been crippling to many dealers and created the risk of paying higher taxes even if a dealership does not show a profit. Not since the Great Recession has there been such a do-or-die moment for our business. Thanks to a lot of hard work, the final Senate bill (as well as the final House tax reform bill) recognized that small-business dealers use floor plan loans to finance our high-cost inventory and are different than big corporations. Limits on floor plan deductibility would disproportionately harm many of our small businesses that are critical to Main Street America.

While challenging, this moment also presented an enormous opportunity to educate members of Congress on how our business operates. I'd like to thank my fellow dealers who have worked tirelessly to reach out to key legislators and explain the unreasonable burdens presented in the original Senate bill. The floor plan loan is the economic cornerstone of the franchised dealership.

This critical amendment was more than just another tax issue to us. The way we've done business for decades was at stake. Without it, many of us would not be able to afford the vehicles that sit in our showrooms and lots—the vehicles customers come to buy. Preserving full deductibility of floor plan interest will help preserve auto sales, dealership jobs and tax revenue for our state and local governments.

NADA's strong grassroots efforts played a huge role in this victory. Dealers across the country contacted their respective elected officials to voice their concerns.

Mark Scarpelli is 2017 NADA chairman and a multi-franchise dealer near Chicago.

Editor’s note: Congress will start voting today on the final version of the “Tax Cuts and Jobs Act” (H.R. 1), with the House going first this afternoon and the Senate to vote either later today or tomorrow. Click here for the House and Senate conference committee’s policy highlights in H.R. 1.

Carmakers Try to Cajole Consumers Into Caring About Air-Bag Recall

Auto makers are stepping up efforts to recall potentially lethal air bags, but customers are slow to respond

Honda, historically the largest purchaser of air bags made by Takata Corp., is among the car companies trying to persuade millions of Americans to replace the potentially lethal components. The biggest automotive recall in U.S. history is under way, and auto makers are required by regulators and legal settlements to take unprecedented steps to reach customers. Amy Hull, a service manager at dealership Page Honda outside Detroit, paid a few of her employees overtime to hand-write customers’ addresses on envelopes containing recall notices, hoping recipients wouldn’t think it was spam. She and her team sent out more than 1,500 notices to customers.
Source: The Wall Street Journal
 [return to top]

The Near Future of Electric Cars: Many Models, Few Buyers

There will be more than 100 different battery-powered vehicles available in five years, despite little interest so far from drivers.

Automakers with ambitious plans to roll out more than a hundred new battery-powered models in the next five years appear to be forgetting one little thing: Drivers aren’t yet buzzed about the new technology. Electric cars—which today comprise only 1 percent of auto sales worldwide, and even less in the U.S.—will account for just 2.4 percent of U.S. demand and less than 10 percent globally by 2025, according to researcher LMC Automotive. But while consumer appetite slogs along, carmakers are still planning a tidal wave of battery-powered models that may find interested buyers few and far between.
Source: Bloomberg
 [return to top]

NADA Partners with OHSA’s Safe + Sound Week in August 2018

The second annual Safe + Sound Week will be held Aug. 13-19, 2018. The event is a nationwide effort to raise awareness of the value of workplace safety and health programs. These programs can help employers and workers identify and manage workplace hazards before they cause injury or illness, improving a company's financial bottom line. Throughout this week, organizations are encouraged to host events and activities that showcase the core elements of an effective safety and health program, including: management leadership, worker participation, and finding and fixing workplace hazards. For more information and to sign-up for email updates, visit the Safe + Sound Week webpage.
Source: OSHA [return to top]

FTC Reminds Businesses of Duties to Victims of Identity Theft

Given several recent high-profile data breaches and the attendant likelihood of identity theft incidents, the FTC has issued a reminder to all businesses of their duties under federal law to identity theft victims.  Specifically, businesses are reminded that they must provide identity theft victims – or law enforcement at the victim’s request – with a copy of records relating to the theft.  Following a written request from an identity theft victim, you must provide the records within 30 days, free of charge and without a subpoena.  You must also take steps to ensure that the person asking for the records is who they say they are, to avoid scammers from taking advantage of this requirement.  Dealers can find more details on these requirements here.
Source: FTC
 [return to top]

FTC Offers Information on Fraud Alerts, Credit Freezes and Locks

After the Equifax data breach, some people are considering placing a fraud alert, freeze, or lock on their credit file to help prevent identity thieves from opening new accounts in their name. To help consumers decide on a course of action, a Federal Trade Commission blog post, Fraud alert, freeze or lock after Equifax? FAQs, describes each option and how it works, how long it lasts, and how much it costs. And to help business owners inform their customers, the FTC offers Fraud alert, freeze or lock after Equifax? Answers to questions people are asking you.
Source: FTC
 [return to top]

Wildfires Rattle Calif. Dealership Community

As the menacing flames of the Thomas Fire push westward toward the coast in Santa Barbara, Calif., curtains of ash and smoke, driven by erratic winds, continue to stifle dealership communities as they grapple with damage, customer slowdown and personal property loss. There have been no reports of any dealerships being destroyed, but the spate of wildfires in California have put a dent into sales -- to the extent that Wells Fargo analysts wrote last week that the fires pose a downside risk to December U.S. auto sales results.
Source: Automotive News
 [return to top]