Governor Pritzker signed Senate Bill 58 into law on Friday, putting an exclamation point on one of the most successful legislative sessions for vehicle dealers in recent memory.  Below is a recap of several important dealer bills that Governor Pritzker has signed into law this summer and a recap of harmful legislation that IADA was able to block during the legislative session.
 

SB 58 - RESTORES SALES TAX CREDIT ON TRADE-IN VEHICLES
This legislation, enacted as Public Act 102-353, restores the full sales tax trade-in credit on vehicle trade-ins. Two years ago, lawmakers capped the sales tax trade-in credit at $10,000, which created a double tax for many motor vehicle customers.   Restoration of the full credit will give all motor vehicle customers a tax credit equal to the full value of their traded-in vehicles.

This legislation becomes effective January 1, 2022.

As a reminder, a customer who makes an advance trade-in of his or her vehicle and waits until January 1, 2022, to use the credit can get the full value of the credit.  The amount of the credit is based on the date that the credit is used, not the date that the vehicle was traded.  Additional information about advance trade-in credits can be found in our August 10, 2021, IADA Bulletin.  The bottom line is that if you have a customer with a used vehicle who is in a position to trade a vehicle in before the end of 2021 and wait until 2022 to replace it, the customer would be able to take advantage of the full trade-in value.  

HB 3940 - DEALER COMPENSATION FOR WARRANTY WORK

HB 3940, enacted as Public Act 102-232,  amends the Illinois Motor Vehicle Franchise Act to require vehicle manufacturers to compensate franchised dealers fairly and adequately for warranty work on vehicles. Also, adjusts manufacturer calculations for time allowances, labor rates, and parts prices for warranty work.  Additional background about the Warranty Reimbursement legislation is available in our Fact Sheet. 

Coming soon, IADA will provide additional guidance to assist dealers in applying for the enhanced warranty reimbursement under P.A. 102-232. 

We extend our appreciation to CATA for their advocacy on behalf of dealers and mechanics in passing this legislation.

This legislation becomes effective January 1, 2022.

SB 573 - 90 DAY DRIVE AWAY PERMIT/ $20 DEALER TITLE

IADA was able to make a couple of changes to the Illinois Vehicle Code, enacted as Public Act 102-154. The first change was to extend the current 30-day drive away permit to be used for 90 days. The extended duration of the drive away permit will give non-Illinois customers sufficient time to title and register their vehicles in their home states. 

P.A. 102-154 also allows dealers to obtain a $20 dealer title when the assignment areas are full, saving dealers from paying the full price on titles. 

This legislation becomes effective January 1, 2022.

HB 2435 - AMENDS THE MOTOR VEHICLE FRANCHISE ACT

There is one dealer bill still awaiting action by the Governor. HB 2435 provides that a manufacturer cannot prohibit or require a dealer to offer a secondary product, including but not limited to, service contracts; maintenance agreements; extended warranties; protection product guarantees; gap waivers; insurance; replacement parts; vehicle accessories; oil; or supplies.

HB2435 permits a manufacturer to offer an incentive program to encourage dealers to offer manufacturer-approved or endorsed secondary products. Prevents manufacturers from dictating to dealers to use only their products and extended service contracts.  

If signed into law, it is effective January 1, 2022.

IADA DEFEATS HARMFUL LEGISLATION

Of equal importance to passage of these dealer friendly bills, IADA was able to block many legislative proposals that would have negatively impacted dealers.  There were several proposals to cap or eliminate the 1.75% vendors' sales tax collection allowance.  The vendors' collection allowance was one place where the Governor's administration was looking for ways to raise revenue for the state.

Currently, dealers and Illinois retailers receive a discount of 1.75% of the sales tax they collect as partial reimbursement for the cost of calculating, collecting and remitting sales tax on behalf of the state. IADA is happy to report that all these proposals were blocked during the 20221 legislative session.

Another harmful bill that IADA was able to defeat was a proposal to cap the dealer doc fee at $150, which would have cut the allowable doc fee by over 50%.

We expect these types of bills to be re-introduced annually as the state continues to look for increased revenues.

THANK YOU--THANK YOU--THANK YOU

IADA offers our sincere thanks to so many people who were instrumental in the passage of these bills.  First of all, IADA would like to express our gratitude to IADA members for your calls and notes to your legislators and the Governor to assist in getting these bills passed to the Governor and signed into law.  Grass roots support from dealers is an important component to our success at the State House.

We would also like to extend our gratitude to our friends at CATA and the Peoria Metro New Car Dealers Association for their work on passing these important dealer bills.

Last, but certainly not least, we extend special thanks to our main legislative sponsors. 

On the restoration of the trade-in cap:  Senator Tony Munoz, D-Chicago, Senator Sue Rezin, R-Morris, Representative Marcus Evans, D-Chicago and Representative Ryan Spain, R-Peoria. 

On the Warranty Reimbursement Legislation: Representative Larry Walsh, D-Joliet, Representative Ryan Spain, R-Peoria, Senator Christopher Belt, D-East St. Louis, Senator Win Stoller, R-Peoria and Senator Sue Rezin, R-Morris.