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December 21, 2015
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MERRY CHRISTMAS!
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 The IADA Officers, Directors and Staff would like to wish you and your family a wonderful holiday season. We have enjoyed every opportunity to work with our membership in an effort to support your businesses. We value your membership and participation and look forward to a happy and prosperous 2016. As always, if there is ever anything we can assist with; do not hesitate to call us at (800) 252-8944.
HOLIDAY OFFICE HOURS
Secretary of Jesse White reminds everyone that all offices of the Illinois Secretary of State will be closed in observance of the Christmas and New Year's holidays. The closures are:
• Dec. 24, and Dec. 25, for Christmas
• Jan. 1, for New Year's
The IADA office will be closed Dec. 24, 25 and Jan. 1. A reminder IADA is available 24/7 at www.illinoisdealers.com. |
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ALLOWABLE DOC FEE FOR 2016 - $169.27
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2016 DOCUMENTARY FEE: $169.27
The maximum allowable documentary fee for 2016 will be $169.27. This is an approximate .5% increase in the 12-month Consumer Price Index for All Urban Consumers issued by the U.S. Department of Labor. The "doc fee" is subject to Retailers' Occupation Tax as part of the gross receipts from the sale of a vehicle.
Pursuant to Section 11.1 of the Motor Vehicle Retail Installment Sales Act (815 ILCS 375/11.1), every retail installment contract under the Act shall contain or be accompanied by a notice containing the following information:
"DOCUMENTARY FEE. A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING DOCUMENTS AND PERFORMING SERVICES RELATED TO CLOSING OF A SALE. THE BASE DOCUMENTARY FEE BEGINNING JANUARY 1, 2008, WAS $150. THE MAXIMUM AMOUNT THAT MAY BE CHARGED FOR A DOCUMENTARY FEE IS THE BASE DOCUMENTARY FEE OF $150 WHICH SHALL BE SUBJECT TO AN ANNUAL RATE ADJUSTMENT EQUAL TO THE PERCENTAGE OF CHANGE IN THE BUREAU OF LABOR STATISTICS CONSUMER PRICE INDEX. THIS NOTICE IS REQUIRED BY LAW."
Please note that if your dealership is operating under a Consent Decree related to documentary fees, the Consent Decree may have requirements in addition to those set forth in the above law.
2016 DOCUMENTARY FEE: $169.27
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LOCALLY IMPOSED SALES TAX CHANGES EFFECTIVE JANUARY 1ST
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Beginning January 1, 2016, the rates of certain locally imposed sales taxes that are administered by the Illinois Department of Revenue will change. Please refer to the attached bulletin from the Illinois Department of Revenue to see if you are affected. Please note that these sales tax rate changes apply only to general merchandise and do not apply to vehicles. The Department of Revenue bulletin outlining the sales tax increases can be found here. |
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TAX BILL PASSED BY CONGRESS WILL AFFECT DEALERS
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December 18th, Congress passed a $622 billion tax bill that will allow dealers and their customers to expense a larger portion of business equipment purchases. The "Protecting Americans from Tax Hikes Act of 2015" lowers taxes and gives automobile and truck dealers and their customers certainty to make business decisions for these important tax provisions.
These provisions will be of interest to those purchasing passenger automobiles and trucks for business purposes, but those vehicles are subject to limits on the amount that can be deducted under Sec. 179 expensing and bonus depreciation allowances.
Extension and modification of increased expensing limitations and treatment of certain real property as section 179 property. The provision permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). These amounts currently are $25,000 and $200,000, respectively. The special rules that allow expensing for computer software and qualified real property (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) also are permanently extended. The provision modifies the expensing limitation by indexing both the $500,000 and $2 million limits for inflation beginning in 2016 and by treating air conditioning and heating units placed in service in tax years beginning after 2015 as eligible for expensing. The provision modifies the expensing limitation for qualified real property by eliminating the $250,000 cap beginning in 2016.
Extension and modification of bonus depreciation. The provision extends bonus depreciation for property acquired and placed in service during 2015 through 2019 (with an additional year for certain property with a longer production period). The bonus depreciation percentage is 50 percent for property placed in service during 2015, 2016 and 2017 and phases down to 40 percent in 2018 and 30 percent in 2019. The provision continues to allow taxpayers to elect to accelerate the use of AMT credits in lieu of bonus depreciation under special rules for property placed in service during 2015. The provision modifies the AMT rules beginning in 2016 by increasing the amount of unused AMT credits that may be claimed in lieu of bonus depreciation. The provision also modifies bonus depreciation to include qualified improvement property.
There is also an extension of an additional $8,000 in first year-depreciation for certain business vehicles purchased in 2015. This provision provides substantial potential savings for a dealership's business customers, but in order to use the provision in 2015, they must purchase qualifying vehicles before December 31, 2015. (This $8,000 amount continues into 2016 and 2017, but is gradually phased out beginning in 2018.)
President Obama has signed this legislation. NADA and ATD strongly supported and advocated for the permanency and extension of these pro-dealer measures.
Dealers are encouraged to consult their tax advisor to determine how to best maximize their potential tax savings. |
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AMERICAN FIDELITY: AFFORDABLE CARE ACT WEBINAR
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Need Assistance with the ACA Employer Reporting?
The Patient Protection and Affordable Care Act (ACA) requires large employers and employers that sponsor self-funded medical plans to report extensive and detailed data for the calendar year that began January 1, 2015. A large employer for this purpose must have 50 or more full time equivalent employees across the control group.
If you have not already done so, now is the time to make a plan for how to complete the IRS Forms 1094/1095 that must be distributed to employees by January 31st each year except in 2016, it is due February 1, 2016 since the 31st is a Sunday. Note that customers who signed up for our WorxTime reporting service do not need to participate in this webinar. The webinar would be helpful for customers who use the WorxTime tracking, but not reporting, service.
Webinar Explaining How to Complete the Forms
If you have not yet secured a resource to complete the forms on your behalf, it may be too late to do so for this year. The good news is that it is possible to manually complete the forms. General information about the employer reporting obligation is available on our website HCReducation.com and American Fidelity Assurance Company customers can review a recorded webinar summarizing the general requirements on the Online Service Center.
In addition, you may join American Fidelity Administrative Services (AFAS) for a webinar that will provide line by line instructions on how to complete the forms, and give you an opportunity to ask questions. We will offer this webinar on the following date:
Thursday, January 7, 2016
12:00 p.m. - 2:00 p.m. CST
REGISTER HERE for
January 7, 2016
The registration fee is $100. Please note that space is limited so register early.
Looking for an Easier Long-Term Solution?
AFAS offers a service to help customers with their ACA reporting obligation. Unfortunately the deadline has already passed to sign up for assistance completing the reports due in early 2016. However, if you sign up for the service for next year, we will provide a $100 credit for any customers who participate in the webinar. Use the link above to register today! |
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MOTOR VEHICLE RECALLS
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On May 19, vehicle air-bag manufacturer Takata entered into an agreement with NHTSA to work with 11 vehicle manufacturers to recall additional vehicles identified as having driver and/or passenger airbags containing their old phase-stabilized ammonium nitrate driver inflators. The agreement roughly doubles the potential number of vehicles with passenger-side bags containing those inflators to 16 million and the number with driver-side bags to 17 million. The defect involves airbag inflators that can degrade over time in part due to exposure to heat and humidity. Many Takata airbags have deployed properly through the years, but a relatively few have ruptured during crashes causing injury and even death.
Important: The exact models and VINs covered by the expanded recall are being determined by Takata in conjunction with the manufacturers who equipped vehicles with these inflators dating back to MY 2001. Working with other airbag manufacturers, Takata is producing replacement airbags for use in recalled vehicles. Replacements will be allocated over time based on risk factors. Impacted manufacturers will communicate directly with their dealerships and with vehicle owners as soon as they know which vehicles are being recalled, when replacement parts will made be available, and the interim steps (if any) vehicle operators should take. For now, dealerships may tell concerned customers that they will get a first class letter in the mail from their vehicle manufacturer if their car or light truck becomes subject to a federal safety recall. For more information on the Takata recall, CLICK HERE.
See Safety Recalls Q&A for Franchised Dealers for additional information on how to handle recalls impacting new and used inventory and service vehicles, and on NHTSA's VIN-searchable safety recall database at www.safercar.gov/vinlookup, an online tool to help identify cars and light trucks with uncompleted recalls prior to making purchases or taking in trades, for used vehicles in inventory, or to help consumers learn about the recall status of their vehicles. See also, Dealer Tips for VIN Lookup and Vehicle Recalls, a NHTSA document prepared in conjunction with NADA.
Questions on vehicle safety recall issues or the new VIN-searchable database may be directed to NADA Regulatory Affairs at regulatoryaffairs@nada.org or (703) 821-7040.
In contrast to the Takata recall and other safety-related recalls is the Volkswagon emissions "issue". The emission issue is not a recall and will not appear on www.safercar.gov, but Volkswagon has a lookup tool on its website at: http://www.vw.com/contact/. The emission issue has been so publicized that it is advisable to look up vehicles on VW's site as well as on www.safercar.gov.
Best Practice for Used Vehicles
- Look up all used vehicle VINs on www.safercar.gov (and possibly on the manufacturer's website) for defect status.
- If there is a stop drive warning-Do not sell the vehicle.
- If the manufacturer has advised motorists to stop driving-Do not sell the vehicle.
- If there is a federal stop sale order-Do not sell the vehicle.
- If your manufacturer issues an order to all line-make dealers-obey the order (even though a competing dealer may be selling similar vehicles).
- If the vehicle is under recall, but there is no stop drive order, stop sale order, or order from your manufacturer to refrain from selling a vehicle, you can sell it. IADA recommends that you print the recall notice and provide it to the customer and keep an initialed copy in the deal file.
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Join IADA and CATA for our annual Dealer Conference this spring, March 20-24, 2016 at the beautiful Ritz Carlton in Key Biscayne, Florida. This breath taking property has so many fabulous activities to offer, and is a short distance from dynamic downtown Miami. Pre and post dates are available, but we need your reservation ASAP!