GNYADA December 2016 Newsletter

2 Looking Ahead to 2017:

Compliance dates and new regulations on the horizon for New York dealers

With 2016 fading in our rearview mirror, we now look to the coming year and what 2017 has in store for franchised new car dealers. To help our members stay prepared and informed, here is a rundown of regulatory issues and enforcement dates coming your way in the year ahead. December 31, 2016 is the first effective-date in New York State’s gradual minimum wage increase. NYC dealers with 11+ employees will need to start paying their minimum-wage-earning workers $11.00 per hour. For NYC dealers with 10 or fewer employees, the new minimum wage is $10.50 an hour. Nassau, Suffolk, and Westchester Counties, $10.00. And in the rest of the state, $9.70. Starting December 31, 2016 , New York State’s Department of Labor is phasing in an incremental increase of the “White Collar” overtime exemption threshold. (See page 7 for region-by-region dollar amounts, or visit gnyada.com/dealers/news/salary for more details.) The threshold increases again on December 31, 2017, so dealers are advised to continually review staff salaries to ensure exempt employees are earning the new minimum. Starting in 2017, captive insurance companies can elect to exclude from income up to $2.2 million of premiums received — up from $1.2 million — and only pay tax on their investment income; however, the 12/31/16 State MinimumWage Increase Kicks off NYS Overtime Exemption Threshold Raises 01/01/17 New IRS Rules Affecting Captives

structure could cause the IRS to deem them a “potentially abusive tax shelter” meaning earned premiums could also become taxable income. Dealers could be at risk for tax, penalties and interest, and should discuss this with the administrator and the dealership’s accountant to ensure compliance with the new rules. Window Tint Inspections Legislation adding window-tint testing to annual vehicle inspection requirements was signed into law by the Governor. Starting January 1 , windows must be tested for light transmission of less than 70%. GNYADA will continue to advocate with the Governor’s Office regarding an increase to the inspection fee, to cover the additional costs for compliance with this new law (labor, equipment, etc). Form I-9 Updates By January 22, 2017 , dealers must start using the updated Form I-9 (Employment Eligibility Verification). The new form has been enhanced for easier digital completion, though it must still be printed and signed for secure record-keeping. 01/22/17 The new annual filing deadline for employers to submit W-2 forms to the Social Security Administration is January 31 , formerly February 28. This deadline also applies to certain 1099-MISC forms , used for reporting payment to independent contractors. The deadline for employers to deliver copies of tax forms to employees is not changing, and remains January 31. 01/31/17 W-2s Must Be Filed by January 31st

03/02/17 Affordable Care Act Reporting Deadline Extended The IRS is again extending the deadline for delivering ACA Form 1095-C (indicating month-by-month health coverage) to employees — the new deadline is March 2 . Other new tax filing deadlines March 15, 2017 Form 1065: Partnership/LLC return April 15, 2017 Form 1120: C Corp return FinCen Form 114: Report of Foreign Bank and Financial Accounts Starting March 7 , new regulations from the New York State Department of Labor will require employers to obtain explicit consent from employees, in order to pay them by direct deposit or payroll debit cards. (Prior consent will remain effective.) The NYS DOL is preparing new forms for employees to complete, in order to give their payment-method consent. June 12, 2017 is the New York City DCA's new response deadline for dealer subpoenas regarding the sale of used vehicles with open recalls. This extension allows for time to develop legislation in the 2017 State Legislative Session that could potentially resolve these City subpoenas without dealers needing to respond to them. Turn to page 4 to see highlights of active legislative issues that are part of GNYADA’s agenda. 06/12/17 New DCA Subpeona Deadline 03/07/17 New Rules for Direct Deposit Payment

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

The Newsletter • December 2016 3