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2011 IADA OFFICERS
Chairman
Tim Mooney
Tim Mooney, Inc.
Tuscola
Vice Chairman
Jim Lombardi
Lombardi Chev Buick
Wilmington
Treasurer
Gary Knight
Carmack Car Capitol
Danville
Secretary
Mike Mangold
Mangold Ford
Eureka
President
Peter Sander
IADA
Springfield
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Your
IADA
Partner
Moving Vehicle Registration Into The Future
(click logo for more details)
Your
IADA
Partner
For Insurance Solutions
to Protect Your Dealership
(click logo for more details)
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June 02, 2011 Vol 2011, Issue 6
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ILLINOIS LEGISLATURE ADJOURNS
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The Illinois Legislature adjourned last night after a long and contentious spring legislative session. During this past week-end the Legislature passed some major issues including some changes to the Workers’ Compensation System. While the legislation was controversial in the business community, some felt it didn’t meet the standard of real reform, the legislation does contain provisions that will produce some savings for Illinois employers.
For more information click here for a copy of the IADA Fax Legislative Bulletin updating members regarding the end of session. IADA will also be sending our annual End of Session Report which outlines all legislative activities undertaken by IADA this legislative session.
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AG DEALER RECOVERY FUND PASSES ON LAST DAY OF SESSION
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HB 880 Proposed by the Attorney General to help consumers hurt by dealers who close their stores and are unable to pay off trade in liens has passed the Illinois General Assembly. HB 880 will be sent to Governor Quinn for his consideration.
The legislation proposes a three member board, composed of representatives from the Attorney General’s Office, Illinois Secretary of State and one person representing dealers, that would oversee the proposed Dealer Recovery Trust Fund.
The Dealer Recovery Trust Fund would add a $500 charge to the annual license fee for each new and used motor vehicle dealer and motorcycle dealer, plus $50 for each additional place of business. It is estimated the fund would collect approximately $2 million the first year. Once the fund reaches a balance of $3.5 million, collection of the fee would be suspended the following year.
The A.G.'s Office has indicated that 48 states have some type of fund or bonding requirement to cover these situations. The original proposal was a $1,000 fee per dealer or a more expensive bonding requirement.
IADA is expected to administer the fund to oversee that the funds are used and collected in accord with the provisions of the proposed legislation. One of the most important provisions included in the legislation was to structure the fund outside the State Treasury as an independent fund. An independent fund would not be available for the State to sweep for cash flow purposes! Currently there is a lawsuit pending before the Illinois Supreme Court regarding this issue; however the fund involved in the lawsuit is considered a state fund!
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DEPARTMENT OF REVENUE MOTOR VEHICLE TAX FORUM
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IADA is pleased to host a Motor Vehicle Dealer Tax Forum presented by members of the Illinois Department of Revenue’s Legal and Audit Divisions.
The meeting will be held on Wednesday, June 15, 2011 at the IADA Offices from 1:00PM – 3:00PM, 300 W. Edwards Street, Suite 400, Springfield, IL 62704
Mapquest directions
Department of Revenue representatives will be available to answer your questions. Topics of discussion are expected to include:
- Proper Use and Documentation of Trade-In Credits
- Taxation of Goodwill Repairs
- Out-of-State Sales
- Tax Exempt Sales
- Taxation of dealer incentive
- Any other tax matter dealers wish to discuss
This forum will provide an informal setting where you can get feedback from high-level Department of Revenue employees on a wide range of tax questions. You are encouraged to ask questions at the forum. However, if you have a topic that you would like to discuss or a specific question you would like answered, please feel free to e-mail them in advance to ldoll@illinoisdealers.com so that the presenters can prepare thorough answers.
Click here for more details and to download registration form. |
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ARE YOUR JOB DESCRIPTIONS UP TO DATE?
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If you have not recently reviewed your employees’ job descriptions to make sure that they match up with the duties those employees are actually asked to perform, you may want to take a look. A job description that includes duties that you no longer require your employees to perform can set you up for an employment discrimination claim or a Fair Labor Standards Act claim. For example, if you deny employment based on a job description that includes heavy lifting, but the job no longer requires heavy lifting, you may subject yourself to an Americans with Disabilities Act lawsuit. Similarly, if you determine that an employee is exempt from overtime pay based upon his or her job description rather than on the duties actually performed by the employee, you may be subject to a Far Labor Standards Act claim. Additional information on this subject can be found on the Fisher and Phillips website at:
http://www.laborlawyers.com/showarticle.aspx?Do-Your-Job-Descriptions-Still-Fit-&Ref=list&Type=1119&Cat=3386&Show=14075
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TIME MAGAZINE QUALITY DEALER NOMINATIONS NEEDED
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IADA is seeking dealer nominations for the 2012 Time Magazine Quality Dealer of the Year Award. (TMQDA)
The TMQDA program promotes new car dealers in America for exceptional performance in their dealerships, combined with distinguished community service, to create a positive public relations forum for all new car dealers.
The 2012 awards will be presented at the opening business session of the NADA Las Vegas Convention on Saturday, February 4, 2012.
This is an extremely prestigious award and we would appreciate your help in nominating a deserving Illinois dealer. Please review the attached nomination form and forward to IADA by the June 30, deadline! Please be assured your assistance is greatly appreciated in promoting outstanding dealers in our state! |
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LEGAL UPDATE
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Last month, the U.S. Supreme Court upheld a class action waiver provision used in an arbitration agreement. In AT&T Mobility LLC v. Concepcion, a contract between cell phone service provider, AT&T, and its customers included a clause requiring the customers to arbitrate any disputes with AT&T directly, and prohibiting them from participating in any class action lawsuit against AT&T. The Supreme Court upheld this provision in a 5-4 ruling.
This decision upholding the validity of class action waivers is good news for dealers who use mandatory arbitration provisions in motor vehicle sales contracts or employment agreements. Additional details about this decision can be found at:
http://www.laborlawyers.com/shownews.aspx?Show=13985&Type=1122 |
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NEW FUEL ECONOMY STICKERS APPROVED FOR 2013 MODEL YEAR
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The federal government unveiled new fuel economy window stickers for vehicles starting with the 2013 model year that for the first time include estimated annual fuel costs and the car or truck’s overall environmental impact. The Environmental Protection Agency and the Department of Transportation, which are jointly responsible for the window sticker program, rejected a radically different design that would have prominently displayed a letter grade from A to F comparing a given vehicle’s fuel economy and air pollution against the entire fleet of new cars. The National Automobile Dealers Association welcomed the new design and said it was relieved that the federal government had rejected the letter grade label. “For decades, car and truck buyers have relied on miles per gallon — or m.p.g. — to compare the fuel economy of different vehicles,” the association said in a statement. “NADA applauds the Obama administration’s decision to drop the ill-advised ‘letter grade’ in favor of one that prominently displays a vehicle’s m.p.g. By doing so, car shoppers can make informed comparisons on dealers’ lots, allowing them to take advantage of new technologies, which will ultimately put more fuel efficient vehicles on the road.”
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AMERICAN FIDELITY DESERVES YOUR REVIEW
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Every business worries about how the numbers are affecting their bottom line. Whether it’s growing your latest sales numbers or trying to minimize your expenses, one number that you want to be sure to focus on is “125.” With profits shrinking and costs rising, employers are taking a second look at their Section 125 Plan to see if they are taking full advantage of this tax code.
MAXIMIZE YOUR PLAN
It’s not often that you can add more and pay less at the same time, but it’s a reality when it comes to maximizing your Section 125 Plan. By adding Flexible Spending Accounts (FSAs) to your Section 125 Plan, you can increase your savings by decreasing your taxable payroll cost. The more employees you have participating in a Health FSA and/or Dependent Day Care Account, the more dollars you’re putting into your bottom line. So not only can your employees save money, but you’ll see tax savings as well.
Health FSAs and Dependent Day Care Accounts allow your employees to direct a part of their pay, on a pre-tax basis, into a special account that can be used throughout the year to reimburse them for eligible medical expenses and/or day care costs. Because their money goes into these reimbursement accounts before FICA, and federal and state income taxes are withheld, you pay less payroll taxes. It’s that simple.
Your employees are your most valuable asset, but in today’s economic climate you may not be able to afford increasing their salary. However, by maximizing your Section 125 Plan you can increase their take-home pay and/or give them additional benefit dollars.
DON’T GO IT ALONE
American Fidelity Assurance Company is one of the industry’s leading Section 125 administrative services provider with more than 25 years of experience and more than 7,500 Section 125 plans nationwide. Based on this substantial experience, we have earned a level of professionalism that you can rely upon. IADA’s partnership with American Fidelity Assurance Company gives you access to one of the industry’s leading Section 125 Administrative Service providers. Their 25 plus years of experience has earned them a level of professionalism that you can rely upon.
They offer FSA recordkeeping services, Health FSA Debit Cards, and a uniform risk coverage policy for Health FSAs. The uniform risk coverage allows you to increase your employees’ FSA contribution maximum, while limiting your exposure on any unpaid contributions. As part of their services, they ensure resources are in place to cover your employees full expense reimbursements, even if their account has not accrued enough money to pay the expense.
Partnering with American Fidelity gives you an array of employee benefit options through: • A broad portfolio of supplemental insurance products, • Access to competitive Core Benefits such as Health, Dental and Vision insurance, • Administrative Services that include Section 125 Administrative Services, Flexible Spending Accounts, and Health Savings Accounts, and • Enrollment solutions that include individual benefit counseling, group education meetings, electronic benefit enrollment, and enrollment reviews. To learn more about maximizing your Section 125 Plan today and the advantages of partnering with American Fidelity call Rick Rosemeier at ph# 800-450-3506 xt. 3004.
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MOVING-AND PREVENTING-AGED PARTS INVENTORY
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Many parts managers describe aged inventory as a part that is in inventory for more than 12 months, but there are different kinds of aged inventory; they are the result of different parts acquisition processes. In parts inventory, there are only two kinds of parts. They are:
Stock Parts
Purchased for future sales based on historical sales demand
Purchased via computer-generated ordering system
Parts that meet stock-status ordering criteria
Recommended by the stock order process
Controlled by the parts manager
Non-stock Parts
Purchased for immediate sale
Purchased based on current demand
Purchased by people via special-order requests
Do not meet stock-status ordering criteria
Minimum phase-in not achieved
Not normally stocked
We may have obsolescence in our inventory, but don’t know where it came from. Once we determine where it came from, we can make adjustments to the process by which we acquired it.
If you have a lot of stock parts that are obsolete, you need to talk to your parts manager(s). They control phase-in, phase-out, days’ supply, ordering parameters, and the DMS system setup.
If you have a lot of non-stock parts that are obsolete, examine your special-order process. Non-stock parts are typically purchased for individuals, but in some cases, the individual may not come to pick up the part. Why? In such a case, you’ll want to review the communications between the parts department and the customer—or even the department’s entire communications process.
This article is adapted from the 2011 NADA convention workshop Managing the Parts Department, presented by Jim Phillips of NADA. All 2011 convention workshop recordings are now available for purchase online, individually or as part of the NADAvt subscription. Sign in to NADA University to purchase this or other workshop recordings in the NADA U Store, or call 1-800-557-6232 and we’ll guide you through the sign-in and purchase process.
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