GNYADA December 2013 Newsletter

To read these stories and get the latest news online, visit the GNYADA website at www.gnyada.com

For Dealer Principals / General Managers / Sales Managers The Newsletter A Publication of Greater New York Automobile Dealers Association

DEC 2013 Volume 23, Issue 9

Reminder: NADA CONVENTION & EXPO 2014 NEW ORLEANS I JAN 24-27

HIGHLIGHTS

Dealers Meet with Gov on Franchise Bill page 2

Dealers Dispute CFPB Claims page 4

GNYADA Challenges Dealer Zoning page 5 Forms and Notices Due In January page 7 Dealership Falls Prey to F&I Con page 11

Employment Corner page 12

The Newsletter is published by GNYADA, a not-for-profit organization representing franchised automobile dealers in the New York metro area. 18-10 Whitestone Expressway Whitestone, New York, 11357

Dealer Hotline 718.746.5900 www.gnyada.com

The Newsletter • December 2013 1

1 Dealers Meet With Governor Cuomo to Gain Franchise Bill Support

dealer licenses to expedite the licensing process.

At the meeting the dealers voiced the need for the passage of the Franchise Reform Act. An extremely positive and extensive discussion of the Act left dealers highly encouraged by the Governor’s responses. This bill, which is the product of more than two years of negotiations with the vehicle manu- facturers, needs to pass both houses of the Legislature before it would go to the Governor. The group also acknowledged Governor Cuomo’s assistance with several initiatives that helped dealers, including signing a bill allowing deal- ers to obtain titles without liens for trade-ins, establishing a secure power of attorney pilot program, and adopt- ing regulations to allow temporary the dealer failed to meet deadlines to perform a facility upgrade. (The renovation was held up waiting for permits.) In May, Subaru sent a second termi- nation notice, alleging the dealer failed to cure the defects it cited in the first notice, and the dealer sued. The dealer raised several grounds in its complaint against Subaru and alleges that Subaru took additional steps that were detrimental to the dealer. Subaru moved for dismissal. The Judge refused, finding the dealer had merit in each of the grounds raised in the complaint. The judge also noted that the dealer has a valid action to recover attorney’s fees, under the franchise law.

GNYADA would like to thank Lou Roberti of Arroway Chevrolet Cadillac for helping facilitate this important meeting. GNYADA, its members, and the members of dealer associations across the state are keep- ing up efforts to secure additional leg- islative support for the Franchise Reform Act. GNYADA has had meetings with many key Legislative leaders, Senators and Assembly members with more to follow, including Senate Democratic Leader Andrea Stewart- Cousins and Senator Kemp Hannon of Long Island.

Governor Andrew Cuomo

Dealers from around the State, along with all of the regional Dealer Associations and the State Association, met with Governor Cuomo to discuss ongoing efforts to amend the New York Franchised Motor Vehicle Dealer Act (“Franchise Law”).

Dealer Blocks Franchise Termination 2

Subaru’s attempt to terminate a New York dealer has been put on hold and the dealer’s rights are being pro- tected in state court, under provisions of the Dealer Franchise Act that GNYADA successfully added in 2008. Following the factory’s attempt to terminate the dealer, the dealer brought an action to challenge that termination and to block it until the case is resolved. The court granted the dealer’s motion for a preliminary injunction staying the termination and the suit is pro- ceeding. Backstory The case involves a complicated set of facts, but central to the story is that Subaru sent a termination letter to the dealer in April 2013, because, it said,

The provision calling for a stay of the termination (that GNYADA added to the Franchise Law in 2008) was key to allowing the dealer to maintain this action and his dealership until the suit is resolved, at the very least.

Call the Association for your copy of the Franchise Law booklet.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013

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Gary Brown to be honored at NADA Convention

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Good Deed award from Suffolk County Boy Scouts.

and Phoenix, sells Chevrolet, Chrysler, Dodge, Jeep, Ram, Honda, Subaru and Toyota brand vehicles. He’s the current chairman of NADA’s Regulatory Affairs Committee and served as finance chairman of the Dealers Election Action Committee and has served on several other committees. He is cur- rently a member of Subaru’s National Dealer Advisory Board. Fox has a bachelor’s degree in finance from Georgetown University in Washington, D.C., and a Juris Doctor from St. John’s University Law School in New York City. dealers from across the country who will be honored at the 97th annual National Automobile Dealers Association (NADA) Convention & Exposition in New Orleans on January 25, 2014. The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. Recipients are among the nation’s most successful auto dealers who must also demonstrate a long- standing commitment to community service. The award is sponsored by TIME Magazine in association with Ally Bank. Brown was recognized by Brookhaven Hospital in 2011 for many years of service on the board of trustees and for his financial con- tributions. He received the Paul Harris award from Rotary and the

He was also honored for his support of the annual Fuoco Memorial Golf “ Feast ival,” which raises money for Camp Pa-Qua-Tuck in Center Moriches, New York –a haven for children and young adults with physical and developmental disabilities. Brown has also supported many service organiza- tions, including Lions Clubs, Kiwanis, Boys & Girls Clubs of America, the American Cancer Society and its Relay for Life event, YMCA, and Habitat for Humanity. Brown is a long-time Board Member of the Association. Brown's dealer- ship was started by his grandfather in 1917. His daughter is now the fourth generation of Browns to be part of the organization.

GNYADA is pleased to announce the nomination of Gary Brown, dealer principal at Brown's Chrysler Dodge Jeep Ram Fiat in Patchogue, New York, for the 2014 TIME Dealer of the Year Award .

Brown is one of a select group of

Bill Fox Elected NADA Vice Chairman for 2014

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The National Automobile Dealers Association’s Board of Directors has elected William C. Fox of Auburn, NY, as vice chairman for 2014. The position puts him in line for chairman in 2015. “I am honored to be elected by my peers as NADA vice chairman,” said Fox, who currently represents New York’s franchised new car dealers on NADA’s board. “I am committed to ensuring NADA’s position as the voice of the dealer, and helping to shape the future of auto retailing for dealers across the country.”

Fox, a partner in Fox Dealerships, Inc., in the upstate cities of Auburn

GNYADA congratulates Bill on being elected vice chair of NADA.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013 3

5 NYS AG Hits Dealer for $136,000 for Charging Administrative Fees

Banks, being pressured by the Consumer Financial Protection Bureau (CFPB), have sent notices to dealers alleging discrimination in their rate markup policies. The CFPB had issued Guidance earli- er this year, warning lenders that if their portfolios show discrimination in loans originated by auto dealers, the lenders will be liable for penalties and restitution. CFPB urged lenders to monitor alleged credit discrimination by dealers and move to eliminate dealers’ ability to mark up rates on customer loans. Some lenders have now alerted deal- ers that they may be violating, “fair lending objectives.” What to do – push back! Generally, dealers should respond to any such letter in writing, challenging The NYAttorney General has settled claims against a Westchester dealer- ship which was adding a $499 “administrative fee” to the purchase price of their vehicles. As a result, the dealer is required to repay a total of $86,826 to customers who were charged the administrative fee. The dealership has also agreed to reform its advertising practices and to pay $50,000 in costs and penalties to the state. The AG claimed the deal- er’s advertising was deceptive. Administrative fees The $499 fee was pre-printed on the sales agreement used by the dealer- ship and was located in the price

column, near other required pre-print- ed fees and taxes that consumers pay when purchasing a vehicle. Thus, the AG said, it appeared to consumers that the “administrative fee” was mandatory and non-negotiable. False Advertising The Attorney General’s investigation also revealed that the dealership repeatedly engaged in false and deceptive advertising, including: Fine print and footnotes that con- tradicted the principal message of the advertisements; Advertised sales without identify- ing the vehicles that were being offered at reduced prices; n n

Advertising leased vehicles for $0 Down without disclosing that there were payments due at the incep- tion of the lease; Falsely claiming it has an “A+” rating from the Better Business Bureau. When this settlement is viewed in the light of prior settlements between the AG and other dealerships relating to pre-printed fees, it is clear that the AG views such fees as deceptive practices. GNYADA advises dealers to avoid such pre-printed fees on their forms. n n

Dealers Dispute CFPB Claims of Discrimination 6

the banks’ assertions and denying unlawful discriminatory actions.

markdown to close a deal that will generate a sales incentive.

Adopt a formal fair lending policy that states the dealership’s policy not to discriminate in any aspect of a credit transaction. Distribute it to sales staff and managers, train personnel, and monitor transactions to ensure compliance. Some dealers have consistent “buy rate markups” for all customers and they deviate from that markup only for significant reasons. Document (internally) any deviations in case of an audit. Valid reasons to deviate from the standard include meeting a competi- tor’s interest rate, extending an adver- tised promotional rate, meeting a con- sumer’s monthly payment target, or a

Go on record with the bank that it is your policy not to discriminate in any sales and credit practices. Ask the bank to disclose their “proxies” (how they determined who was a “protected class” and who was allegedly discrim- inated against) and reserve the right to challenge their validity. If you rely on multiple lending sources, advise this lender that it only receives a portion of your finance deals (and not a random sample). Thus, any conclusions that they have reached are based on inaccurate and incomplete information, and logically, are thus inaccurate and incomplete. Finally, request that they withdraw their conclusions in writing, and pro- vide a copy to you.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013

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Louis Roberti Elected NYSADA Chairman 7

Louis Roberti, of Somers, N.Y., has been installed as Chairman of the New York State Automobile Dealers Association. He is a current owner of Arroway Chevrolet Cadillac in Katonah, located near Mt. Kisco, NY.

ated from Manhattan College in 1973 and from the Wharton School of Business in 1989. Lou has served as Director and an Officer of NYSADA for the past 14 years. He has also served as a Director of the Greater New York Automobile Dealers Association.

Since 2000, Lou, has volunteered as a pilot with Angel Flight, a non- profit organization that arranges free air transportation for any legitimate, charitable, medically related need.

On behalf of GNYADA, we wish Lou great success in his new role.

Lou began selling cars in 1974 and bought Arroway in 1988. He gradu-

Best Single Car Sales Month Since February 2007 8

Notably, this was the best November since 2003 and only about 84,000 units behind the industry's best November ever, in 2001. Industry sales topped 16 million units from 1999 through 2007 before the col- lapse of 2008-09. Of the larger automakers, only Honda slipped, 0.1% (and that was from a record November in 2012).

Nationally, sales of cars and light trucks rose 9 percent in November to 1.24 million units, the best pace in almost seven years. The industry's seasonally adjusted annualized rate of sales (SAAR), rose to 16.4 mil- lion, up from 15.3 million a year ear- lier and crashing through analysts' forecasts that had been in the 15.8 million range.

November’s SAAR was the highest since that indicator reached 16.8 mil- lion in February 2007, before the start of the recession. It's is also the second time the SAAR has topped 16 million this year, having done so in August, when it reached 16.1 mil- lion. Economists take that as a sign that the industry's recovery still has plenty of gas in the tank.

GNYADA Delays Code Changes that Impact Dealers 9

GNYADA has successfully obtained a delay of a hearing on proposed zoning code changes that would affect automobile dealerships in the City of New Rochelle. As soon as we learned of the proposal, we contacted city officials to express our concerns and objections. We impressed upon them the compli- cated nature of the issue and the major negative impact the proposals could have on dealerships, which are a significant business in New Rochelle. The proposals are very restrictive and could make dealership operations difficult and expensive.

As a result of our objections, a public hearing scheduled on that proposal has been delayed until at least next month. The delay will give us an opportunity to meet with those City officials and provide information and the dealerships’ point of view as to the hardships that the new rules rep- resent. In addition to the numerous state and federal laws and rules with which dealers must comply, they are also subject to codes and ordinances of the numerous counties, cities, towns, and municipalities in which they operate. GNYADA will continue to

make its concerns known to the city officials, and work to ameliorate the impact of such proposals on the deal- erships. We have scheduled a meeting with the city’s Commissioner of Development in early January. In the meantime, we will collect data to demonstrate the negative impact of this proposal and present it to the City officials. We have been in con- tact with all the dealers in the city, and have invited them to participate in the meetings and the public hear- ing on the proposed amendments.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013 5

Gov Cuomo’s Tax Reform Commission Issues Report

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A recent report by a national “tax watch” group put New York dead last among states when comparing the complexity of tax codes and tax rates. The National Tax Foundation ranked New York 50th overall, just behind New Jersey and California. New York's individual income tax ranking was 49th. As reported above, Gov. Cuomo has established tax commissions that will recommend ways to simplify the tax law and cut taxes. Cuomo and the legislature have extended an income tax surcharge on top earners and a Gov. Andrew Cuomo’s Tax Reform and Fairness Commission, empaneled to make the state’s tax laws “simpler and fairer,” has recently presented its Report. It has proposed a number of reforms that, if adopted by the State Legislature, could impact dealers. Here is a summary of relevant proposals: Sales Taxes State sales tax exemptions intended “to shield low-income households from burdensome taxation,” are inef- ficient. The Report suggests eliminat- ing some exemptions and using the resulting higher revenues to enhance targeted income tax credits. The Commission discussed the $2 cap on the state’s gasoline tax. While not directly endorsing its repeal, the Commission noted that doing so would yield about $371 million rev- enue annually for the state. Corporate Taxation The report also stated that the tax laws are too complicated and sug- 11

The Commission also suggested major reforms to New York’s estate tax, noting that the exemption levels for federal estate and gift taxes were recently raised to $5.25 million. It recommended that New York raise its estate tax exemption level to $3 mil- lion from $1 million and to reinstate the state’s gift tax for gifts above the $3 million level. Property Taxes The Commission found disparities with local governments’ property assessment standards, the variability in the frequency of assessments, and that multiple local governments per- form this work, increasing costs for New York businesses. They suggest- ed addressing those problems to reduce long-term costs. GNYADA will follow the results of the Report as the legislature addresses these issues in the next budget.

business tax that together have gener- ated more than $2 billion in addition- al tax revenue annually since 2010. According to the Associated Press, a Cuomo spokesman said the Tax Foundation's conclusions conflict with other performance measures. The spokesperson said the state unemployment is 6.9 percent, which is less than the national rate of 7.3 percent, and that Forbes magazine recently ranked New York 21st among states in comparing business climates. gested that they need to be reformed. More than 20% of corporate tax rev- enues are collected through audits. That high figure supports the need for reform and highlights the complexity of existing tax law provisions. The report recommended (1) combin- ing the MTA surcharge return with the main corporate tax return to sim- plify filings; (2) allowing limited lia- bility companies (LLCs) to pay annu- al filing fees when business owners file their personal income tax returns; and (3) making state audit practices consistent with those used by the IRS. Also, the Commission suggested narrowing the Investment Tax Credit, yielding $65 million in revenue. Personal Income and Estate Taxes The Commission also proposed per- sonal income and estate tax reforms, such as giving tax professionals more leeway to e-file returns on behalf of clients and eliminating obsolete processes to make the state’s income reporting requirements more like the federal requirements.

New York has Highest Taxes in the Nation

“Over the last three years, New York State has added more than 300,000 private sector jobs, received a posi- tive outlook from Standard & Poor's and Moody's (credit rating services), reduced barriers and lowered taxes for businesses and put the state on secure fiscal footing,” the spokesman said. The 2014 Index represents the tax climate of each state as of July 2, 2013 and includes corporate tax, individual income tax, sales tax, unemployment insurance tax and property tax data.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013

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Now Track your Duplicate Title

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title was processed. Then, you will receive the title via the US Postal Service within five to seven days. The best part of this new added fea- ture is that it’s FREE. No, that’s not a misprint - it’s free! For a new, updated cover sheet, please call Jean Marie at DMV-DIRECT at 718.747.0400, and she will fax one to you, immediately.

section on the cover sheet. If you elect “rush duplicate title”, we will e-mail you a UPS tracking number, and you should receive the duplicate title on the second business day after we receive your request. Track standard duplicate titles, also If you select a regular duplicate title, once DMV-DIRECT completes the transaction, we will send you an e- mail that confirms your duplicate GNYADA Assistance Available GNYADA’s Employee Relations Plan (ERP) Division has created a com- prehensive instruction booklet, Guide to New York State Labor Law Employee Pay Rate and Payday Forms specifically for automobile dealers’ use. This Guide provides line-by-line instructions, specific examples of completed forms and sample exemptions that apply to dealership employees and will help dealers comply with the New York State Wage Theft Prevention Act.

Ever wonder when you will receive that rush duplicate title you ordered? Have you worried whether DMV- DIRECT even received the duplicate title application you sent? Do you find yourself asking, “Is it done? How can I track this order?” Tracking for rush duplicate titles DMV-DIRECT heard you, and now offers tracking for your order. When you fax or mail a rush duplicate title application, just complete the e-mail

Annual Payday Forms Due February 1 Under NYS law, dealers must pro- vide written notices regarding wages 13

Dealers can review sample completed forms at www.gnyada.com and blank forms may be downloaded from this site. If you have any questions about com- pleting forms for your dealership, please call Sue Bieber at 718.746.5900 or email her at susan@gnyada.com .

to all employees (including those covered by a collective bargaining agreement) annually. Employers must provide notices of pay to new hires at time of employment and again no later than February 1 each year. Employees should sign the form and dealers are required to keep the origi- nal for six years. Failure to provide the notice may result in penalties of $2,500 for each violation.

14 NYC Requires Employers to Give New Notices Starting in January

Mayor Bloomberg recently signed a new law that expands protections for pregnant employees. Beginning January 30, 2014, employers in NYC must give written notice to new hires (and by May 30, 2014 to existing employees) of their rights to be free from discrimination on the basis of pregnancy, childbirth, or a related medical condition.

New York City dealers should update their new hire packages to include the notice and plan to distribute it to cur- rent employees on or before May 30. If you send the notice by email, obtain an electronic receipt or delivery notice. While employers are not required to post this notice, the new law encour- ages posting in a conspicuous place.

The NYC Commission on Human Rights has published the notice that must be given to new and existing employees in English and several other languages. These notices are available on the Commission's website at http://www.nyc.gov/html/cchr/ html/publications/pregnancy-employ- ment-poster.shtml.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013 7

Winter Storm Preparedness Checklist 15

moderate snow in a short amount of time to a blizzard lasting for days. Common characteristics of winter storms are dangerously low tempera- tures, strong winds, ice, sleet, and freezing rain. Know the Terms: Winter storm watch – be alert, a storm is likely Winter storm warning – take action, the storm is in or entering the area Blizzard warning – snow and strong winds combined will pro- duce blinding snow, near zero visi- bility, deep drifts, and life-threaten- ing wind chill – seek refuge immediately! n n n

Storm season is a reminder to be prepared for severe weather, which can lead to property damage, employee illness or injury, and possible business closures. GNYADA has included a Storm Preparedness Checklist on the follow- ing page to help you identify the areas of your business that are most susceptible to winter hazards. To minimize damage and recover quickly following a winter storm, it is a good idea to develop a plan of action for your business and your staff.

Winter weather advisory – win- ter weather conditions are expect- ed to cause significant inconven- iences and may be hazardous, especially to motorists Frost/freeze warning – below freezing temperatures are expected and may cause damage to plants, crops, or fruit trees This information and the chart inserted with this Newsletter , are provided courtesy of Agility Recovery Solutions, provider of busi- ness continuity and disaster recovery solutions. Visit their website at www2.agilityrecovery.com. n n

Winter storms may range from a

16 Dealer is Dropped by TrueCar

because it financed too many deals through American Honda Finance Corp and not through USAA. The dealership said it presented the best available finance deal to its con- sumers, whether from American Honda Finance or USAA. TrueCar’s model, it said, could force the con- sumer to pay higher rates. Had the dealer complied with the program,

the customer might not ever know there were lower rates available.

Automotive News has reported that TrueCar Inc. has dropped an east coast Honda dealer from its network because the store failed to finance enough vehicle sales through USAA, a TrueCar partner. According to TrueCar, the Honda dealership was not reaching even half of its USAA target for finance deals. In dropping the dealer, TrueCar indicated the dealership violated its contract

Given the regulatory climate, with the CFPB closely scrutinizing credit across the country, dealers should be wary of any requirements that don’t allow them to present the best financing alternatives available to consumers.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013

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17 GNYADA Members On Track to Reach 1,000 Coats for New York Cares New car dealers make huge charitable contributions to the communities in which they reside throughout the year, but they are especially active during the holiday period. This season, GNYADA and over 50 Association members have teamed up with New York Cares to donate gently-worn coats to their 2014 Coat Drive. The dealers (listed below) all signed up to become collection points for coats. So far, almost 1,000 coats have been collected by these dealers for distribution to those in need. Many thanks to those dealerships that donated space, time, and outerwear to this year’s coat drive. If you would like to sign up as a coat collector to keep New Yorkers warm this winter, contact Jennifer at GNYADA headquarters at 718.746.5900 ext. 235.

Porsche of Huntington Potamkin GM Potamkin Mitsubishi Hyundai Rallye Acura Rallye BMW Rallye Collision Center Rallye Lexus Rallye Mercedes Sayville Ford Smith Cairns Ford Lincoln Smithhaven Chrysler Jeep Dodge RAM Smithhaven Mazda/Mitsubishi Smithtown Acura Smithtown Toyota/Scion Van Buren Buick GMC Volvo and Land Rover Mt. Kisco

Ford Lincoln of Huntington Greater New York Automobile Dealers Association Habberstad BMW of Bay Shore Habberstad BMW of Huntington Helms Bros Interstate Toyota Karp Buick Karp Kia Karp Volvo

86th Street Chevrolet Apple Honda Atlantic Chevrolet Audi/Porsche of Southampton Bayside VW Bill Kolb Jr. Subaru, Inc. BMW Mt. Kisco BMW of Southampton Center for Automotive Education & Training Chevrolet 112/Hyundai 112/Mazda 112 Chevrolet of Huntington City Mitsubishi Classic Audi Competition BMW of Smithtown

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18 Rallye Motors Donations to GNYADA Coat Drive Approaching 500

New York Cares and the Greater New York Automobile Dealers care also. GNYADA Treasurer and Board Member Nick Toomey, Vice President of Rallye Motors in Westbury, New York, helped kick-start this year’s coat drive with a donation of 200 coats valued at $20,000, and as of this writing is approaching 500 total donations. Rallye BMW, an official New York Cares coat collection site, is one of many dealer collection sites arranged by GNYADA in partnership with New York Cares to collect coats and help keep New Yorkers warm this winter. This year marks the 25th anniversary of the Coat Drive. “We’re honored to be a part of this important cause and to get this most worthwhile event underway,” said Toomey.

Senator Jack Martins and New York Cares' Ed Lada, Senior Director of Finance and Operations, thank Rallye Motors for their generous donation.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013 9

Does A Cashier’s Check Trigger 8300 IRS Form? The customer paid for a car in part by wire transfer and in part using a cashier’s check in the amount of $10,000. The dealer’s question was whether he needed to file an 8300 form in connection with this transac- tion. less is “cash” if it is received in a retail sale or if it is a transaction where the dealer knows the con- sumer is trying to avoid the reporting requirement. However, the IRS also makes clear that receiving a cashier’s check for $10,000 will only trigger check for $10,000 and a wire trans- fer for the balance, the dealer would not have to file an 8300 form. However, if he or she received even one cent more in cash or cash equiv- alents, or if the dealer believed the buyer was structuring the deal 19

specifically to avoid the reporting requirement, then the dealer would have a duty to file an 8300 in con- nection with this transaction.

the reporting requirement if that cashier’s check is part of total cash payments that equal more than $10,000. In this case, the question is whether payment via a wire transfer in the same transaction constituted a cash payment that would put the transac- tion over the $10,000 cash amount and trigger a reporting requirement. The IRS Alert indicates that, “A wire transfer does not constitute cash for Form 8300 reporting,”

Keep in mind that the IRS rule requires dealers to report cash pay- ments greater than $10,000. A pay- ment of any amount up to and including $10,000 in cash (or cash equivalents) does not trigger the requirement to report the transaction to the IRS, as long as the dealer doesn’t suspect the buyer is attempt- ing to structure the deal just to avoid the reporting requirement. In its Automotive Alert, the IRS indi- cates that a “cashier’s check, bank draft, traveler’s check, or money order” in the amount of $10,000 or

Filings for qualifying events are due 15 days after the transaction.

Disclaimer: this article is intended to provide information only; it does not provide specific legal advice. If you require specific legal (or accounting) advice, talk to your dealership’s legal or accounting professionals.

Thus, if the only payments received in this transaction were a cashier’s

Year-End Tax Reminders Checklist

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YEAR;END TAX REMINDERS FOR AUTO DEALERS GNYADA ispleased tosupplyyourdealershipwith the2013Year-EndTaxReminders forDealersasabene0tofmem- bership in thisAssociation.Thiscomprehensivechecklist isageneralguide tohelpyourdealershipprepare forannual tax reporting. This reminderprovidesgeneral information regarding tax issues inautomobiledealershipsanddoes notconstitute legalor taxadvice.Forspeci0cadvice,consultyouraccountingprofessional.GNYADA thanksRichards, Witt&Charles,LLP forpreparing this checklist forourmembers.

Enclosed with this Newsletter is a 2013 year-end checklist for dealers. This checklist is a general guide to help dealers prepare for annual tax reporting requirements. The list is divided into two sections:

(1) a checklist for tax-related materials, and (2) a list of accounting reminders.

Dealers are reminded to review their records for available deductions, tax credits, and other tax savings. If your dealership has been remodeled, additional tax savings may be available. Reconciling key accounts and conducting parts inventory are examples of year-end accounting practices. GNYADA thanks Paul Charles, CPA, Richards, Witt and Charles for preparing this document for our members.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013

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GNYADA’s New Workers’ Comp is Saving Dealers on Premiums

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Does your dealership have Workers’ Compensation coverage through an insurance carrier? If so, did you know that you have no requirement to submit a “Reservation of Rights” letter, and you can shop around for a better policy anytime?

If this describes your dealership, contact Michael Conway at the GNYADA Insurance Brokerage to see how much you can reduce your costs, as we have done so for other dealers, with an individual, dividend eligible policy from Magna Carta

Insurance. Time is money! Call Michael Conway now, at 718.746.8100 or email to mconway@gnyada.com .

Dealers Contribute to GNYADA’s PAC

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open to the positive impact that deal- erships make in their communities. Through PAC contributions and other outreach efforts, we are able to build positive relationships with those who make policy decisions affecting our members. You can make contributions right on your membership dues invoice by adding the suggested additional donation amount of $500 or more. You can also make a donation by calling Jennifer at the Association at 718.746.5900 ext. 235. Thank you for your continued support.

are also working to roll back unneed- ed rules and regulations that increase costs and sap profits. Last year we saw the successful pas- sage of legislation creating a new right for dealers to obtain a clear title when the lender failed to provide one. We also helped to prevent new laws that would have negatively impacted dealers, such as an annual requirement to inspect window tint- ing on vehicles. GNYADA’s PAC supports candidates who have demonstrated a willingness to consider dealers’ interests and are

GNYADA’s comprehensive legisla- tive agenda in Albany aims to protect franchised new car dealers from laws and regulations that would make it more difficult or less profitable to operate in New York. Our PAC relies on dealer participation, and contributions to the Fund. So far 90% of dealers who have paid their 2014 dues have contributed to the Association’s Political Action Fund. We continue to fight to ensure that New York has the one of the best Franchise Laws in the country. We

Dealership Conned by F&I Scam

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Just when we thought there was nothing new, along comes something new. As we understand the situation, like many aftermarket products, LoJack offers an incentive or reward to the F&I personnel in dealerships. We have heard that in one case, the F&I salesman recorded non-existent sales just to obtain the incentives. The dealer believes that the employ-

ee was working with someone inside LoJack to either falsify sales or to install products without charging the customer, just so he could “earn” the incentive. Apparently, both employ- ees have been terminated by their respective employers. However, LoJack wants to be paid for the units that were installed, and is looking to the dealer for compen-

sation, even though the ultimate cus- tomer never paid for the unit.

Tight controls, including with regard to aftermarket products and sales, are needed to prevent this problem from happening at your dealership. Even if the vendor shares responsi- bility for the scam, it still could be an expensive mess to unravel.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013 11

EMPLOYMENT CORNER

NYVIP2 Have you transitioned to your new New York State inspection equipment? Any problems? Call Sue or Bill at 718.746.5900.

GNYADA’s Employment Corner is a free recruiting and job placement service that lists qualified candidates for positions at dealerships. If you have a position to fill, call 718.640.2012 .

FILE #

POSITION

RESIDES IN

OFFICE

Bookkeeper

Bayside

590 591

Rockaway Beach

Controller

Lindenhurst

592

Executive Assistant/ Receptionist

Staten Island

593

Regional Meetings

SALES

Sales Manager (New/Preowned)

Plainview

594

Representatives from regulatory agencies will talk to dealers about hot topics and consumer issues. Mark your calendar. Three dates/locations:

SERVICE

Save the Date

Parts Driver

Springfield Gardens

595

Parts Manager

South Hempstead

596

Service Advisor

Island Park

597 598

February 25, 2014 Westchester Westchester Marriott

Syosset

n

Service Manager

Lynbrook

599 600

Pleasantville

February 27, 2014 Queens

Service Technician

Syosset

601

n

Center for Automotive Education & Training

Contact Us: 18-10 Whitestone Expressway | Whitestone, NY | 11357 Dealer Hotline: 800.245.4640 GNYADA Headquarters: 718.746.5900 E-Mail: assistance@gnyada.com DMV-Direct: 718.747.0400 GNYADA Insurance Brokerage, LLC: 718.746.5900 New York International Automobile Show: 718.746.5300 Center for Automotive Education and Training: 718.640.2000

March 11, 2014 Long Island Huntington Hilton

n

The information contained in this newsletter may not be relied upon for the avoidance of tax penalties. Readers are urged to discuss any issues raised in this newsletter with their legal and tax professionals. Printed on FSC certified material. All original material except where noted. © GNYADA 2013

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • December 2013

12

WINTER STORM PREPAREDNESS CHECKLIST

Before the Storm

n Check your insurance coverage for protection against winter hazards. n Check your procedure for restoring electrical services on an item-by-item basis. n Establish a procedure for relocating salvageable and undamaged stock and supplies. n Add the following supplies to your disaster supplies kit: rock salt (to melt ice on driveways), n sand (to improve traction), and snow shovels (or other snow removal equipment). n Determine your greatest risk potential: loss of heat, frozen pipes, and/or loss of access due n to snow/ice. n Identify who is responsible for keeping heating equipment in good working order: n business owner or landlord. n Identify who is responsible for snow/ice removal: business owner or landlord. n Determine what equipment needs to be protected from freeze-up, i.e. computers, n telecommunications, manufacturing equipment, etc. n Are portable heaters or other emergency equipment needed and available? n If snow and/or ice prohibit access to your business, are there alternative ways to enter your premises? n Locate heaters, snow blowers, generators, and cold-weather equipment should it be needed. n Make sure heating and heat-producing process equipment is in good condition and operating n efficiently. n Arrange for snow removal from driveways, doorways, and roofs. n Drain all idle pumps and compressors, making sure jackets are vented to protect against freezing. n Provide proper lubrication for cold weather operation (i.e., emergency generators, snow blowers). n Test cold weather equipment periodically. n Assign someone to check indoor temperatures should your place of business be vacant for long n periods of time. n Keep driveways, walkways, and doorways clear of snow and ice. n Open water faucets slightly to let them drip in order to keep water flowing through the pipes that n are vulnerable to freezing. Ice may still form, but the open faucet helps prevent the pipe from n bursting. n Keep names and phone numbers of your heating contractor, plumber, fire department, insurance n agent, and building owner easily accessible. During the Storm n Seal all openings with caulking and insulation where cold air can enter. n Repair walls and roofs to prevent drafts; inspect roof drains for debris. n Make sure storm windows are effective, if appropriate.

Your People

n If in the event of prolonged store closure consider redirecting your phones lines to cell phones, n n answering service etc. n Ensure you have an emergency communication plan in place prior to the storm, evacuation, or threat. n Have all employees, vendors, and client contact information on hand. n Following the storm, notify all critical people of next steps, based on damage.

Greater New York Automobile Dealers Association

The Newsletter • Winter Storm Checklist