Dealers Claim Success, MD Dealers Battle Tax Issues
Despite the contentious conclusion to the 2002 Session of the Virginia General Assembly last week over transportation and education tax referendum issues for Northern Virginia, Virginia dealers, by and large, claimed success for the 60-day session. Emissions and safety inspection fees were increased, and lawmakers approved the sale of low speed vehicles.
Defeated was a measure that would have required dealers to give personal property tax information to all customers.
And as the commonwealth dealt with a huge shortfall in the budget, VADA, with WANADAês support, was able to forestall any mention of increasing the sales and use tax on vehicles.
Budget issues are also the top priority in Maryland, where legislators wonêt adjourn until April 12. Dealers are opposing an attempt to help ease the stateês budget woes with proposed legislation that would cut in half the amount retailers could retain when collecting sales or excise tax on behalf of the state a measure that could cost dealers $3.5 million.
Below is a review of some of the major measures passed or defeated in Virginia, and an update of ongoing issues in Maryland. Virginia
Bills Passed:
àHB 196, Vehicle safety inspections and emissions inspections; maximum fees, increases the safety inspection fee to a maximum of $15 and the emission inspection fee to a maximum of $28. All safety and emissions inspection stations would have to post their hourly labor rates and their maximum charges for safety inspections and emissions inspections.
àHB 490, Liens; enforcement of storage liens, increases from $3,000 to $5,000 the value of certain personal property affected by a storage lien. As a result, the lien may be enforced against any personal property stored with a value that does not exceed $5,000.
àHB 499, air bags, makes installation of anything other than an airbag designed for the vehicle without the consent of the owner a misdemeanor.
àHB 571/SB 447, low-speed vehicles, allows limited use of low speed vehicles on Virginia roadways where the speed limit is no more than 35 miles per hour, and brings dealerships selling those vehicles under the jurisdiction of the Motor Vehicle Dealer Board.
àHB 250, Study: vehicle safety inspections, authorizes a joint study committee made up of members of the House and Senate and affected industries to study all aspects of the safety inspection system.
àSB 68, Motor vehicle titles; joint owners, clarifies that the issuance of a certificate of title to two persons, jointly with right of survivorship, shall not be used by one of the joint owners as a defense to the lienor’s enforcement of a security interest in the vehicle that was granted by one or both of the joint owners of the vehicle.
Bills that Failed to Pass
HB 460, Transportation of students, would have, in effect, precluded the use of passenger vans and other vehicles for transporting public and private school pupils.
àHB 676, motor vehicle dealers; buyers’ orders and personal property tax forms, would have required motor vehicle dealers to provide a personal property tax form to purchasers at the time of the sale.
àSJ 2, Study; Department of Motor Vehicles, would have looked at the appropriateness and feasibility of regulating automobile title service agents and requiring the use of private title service agents in transactions involving the transfer of vehicles titles.
Maryland
Meanwhile, Maryland dealers have been asked to voice their opposition to SB 828/HB1274, which would cut in half the amount retailers could retain when collecting sales or excise tax on behalf of the state. Currently, dealers retain 1.2% of the 5% excise tax or $24, whichever is less. SB 828/HB 1274 would reduce this amount to .6% or $12, whichever is less.
The Senate Budget and Tax Committee approved the legislation last week and it is due for a floor vote imminently. (In a small success, the bill was amended to add a two-year sunset provision.) The House Ways and Means Committee is expected to vote on their bill shortly, but word is this is not a done deal yet.
MNCTDA and WANADA have joined a coalition of small businesses who are strongly opposed to this legislation, and an alert was issued on March 6 to Maryland dealers to contact their state legislators. It should be pointed out that dealers are providing a valuable service to the state when they collect the excise tax. If MVA had to collect the tax, they certainly could not do it for $12 per vehicle. Therefore, cutting the reimbursement in half is unreasonable.
In other actions:
àSB689, which requires booster seats for children up to the age of 6, cleared a Senate committee.
àSB 608, prohibiting replacement of an air bag with anything else, is moving forward and expected to pass.
àSB 321, which would change the definition of total purchase price on a motor vehicle to allow for any trade-in, died in committee.
àHB 031, a bill to prohibit drivers from using cell phones, died in committee.
àSB 659, which provides specified employees with 12 weeks of leave a year under the Maryland Family and Medical Leave Act, is being closely watched and will be opposed by Maryland dealers.
A full report on actions taken by the Maryland House of Delegates will be forthcoming in The WANADA Bulletin at the conclusion of the session next month.
Download Bulletin PDF