Dealers lobby on tax reform at NADAs Washington Conference

Dealers lobby on tax reform at NADAs Washington Conference

NADAs Washington Conference this year fell on the inauspicious date of Tuesday September 11, as it did the day of the attacks on the World Trade Center and the Pentagon 11 years ago. But this time the conference continued as planned, as nearly 400 dealers lobbied their members of Congress on various issues, starting with the repeal of the estate tax.

It was the first time in 12 years that Phil Brady did not preside at the conference as NADA president. Brady became senior vice president of government affairs at Philips 66 as of last month. Joe Cowden, NADAs COO is interim president.

WANADA Chairman Chip Lindsay, past WANADA Chairmen Jack Fitzgerald, Geoff Pohanka and Jack Pohanka all attended, as did WANADA CEO and assistant CEO Gerard Murphy and John ODonnell respectively. Among the speakers were NADA Chairman Bill Underriner, Sen. Max Baucus (D-Mont.), Acting Secretary of Commerce Rebecca Blank and House Majority Whip Kevin McCarthy (R-Calif.). Those in attendance agreed that the uncertainty of the elections made it difficult to make forecasts about the fiscal cliff or any other issues.

Nonetheless, NADA has several legislative priorities for which dealers from across the U.S. lobbied their Congressmen.

Estate tax rates should remain at 35 percent. Unless Congress acts by December 31, the estate tax will rise on January 1 from 35 percent with a $5 million per-spouse exemption to 55 percent and a $1 million exemption. Most dealerships are family-owned businesses with significant estate tax exposure. NADA supports a permanent solution to the estate tax in 2013. The issue will likely be debated in the lame-duck session after the November election, prior to the inauguration.

LIFO should be preserved. Congress has considered repealing LIFO (the last in, first out inventory accounting method) several times in the past few years to raise revenue. Doing so would require dealers to report their LIFO reserves as ordinary income, resulting in a large tax increase. NADA is lobbying for no changes in the current law.

Tax reform should protect small businesses from tax increases. With a discussion of tax reform increasingly likely in Congress next year, NADA is asking that any reform include both C corporations and pass through entities such as S corporations, partnerships and LLCs. The Obama administration has proposed reform that would affect only C corporations, but NADA believes all small business entities should be treated equally.

Right-to-Repair legislation is unnecessary. A coalition of aftermarket parts manufacturers is promoting H.R. 1449, a bill that requires automakers to turn over repair information so all auto technicians have equal access. But NADA says independent repair shops already have access to the information they need to make repairs. Automakers and third party vendors sell the information to independent repair shops. The bill has been tied up in the House Energy and Commerce Committee since Spring 2011.

Congress should retain service advisors overtime exemption. The Department of Labor has tried to roll-back a decades-old overtime exemption for service advisors. The FY 2012 Labor-HHS Appropriations bill prevented DOL from spending money to enforce the rule change, and NADA is pushing for a similar restriction in the 2013 bill.

End the mandate for auto insurance booklets. H.R. 5859 would repeal a mandate that requires the National Highway Traffic Safety Administration to distribute a booklet about auto insurance to car buyers through auto dealers. They are required to keep a copy and have it available for prospective new-car buyers, but consumers rarely request it. The House has passed the bill and NADA wants the Senate to follow suit.