New Transportation Plan Impact on Virginia Auto Dealers and their customers
-Update March 27, 2013-
As you know, this General Assembly session had a frustrating conclusion for the VADA, with a final transportation plan increasing the vehicle sales and use tax from 3% to 4.3%.
Since the General Assembly adjourned in late February, we have been working with the Governor's office on amendments to the bill to reduce the increase in the vehicle sales and use tax. Dealers around the Commonwealth wrote to the Governor in support of a reduction in the increase.
Monday was the deadline for the Governor to send his changes to the General Assembly.
He has proposed reducing the increase to 4.15% - maintaining the phase in over the next several years (4% July 1, 2013 with a .05 percent additional increase every July 1 thereafter until it reaches 4.15% as of July 1, 2016.)
Here is a short review of where we have been in this issue:
- The VADA had been involved in discussions on this bill for months. Proposals had been made concerning all sorts of revenue.
- A sales tax on repair labor was proposed and rejected after our input.
- The original proposal was 5.3% - making the vehicle sales and use tax to the same rate as the retail sales tax.
- We have been successful in reducing the tax rate and mitigating its impact on our dealers and their customers, from 5.3% to 4.3% in the plan that passed the General Assembly and now down to 4.15% as proposed by the Governor.
- We proposed language to exempt rebates from the tax and it was included in the bill.
The Governor has been very receptive to our concerns and was willing to further reduce the increase, but ultimately, it came down to strong opposition from the legislative architects of this plan. They made it clear that any further reduction in the vehicle sales and use tax would doom the plan. The Republican leadership in the General Assembly was simply unwilling to compromise on this issue.
This was all about the "arithmetic" (as President Clinton would say) -- the General Assembly wanted a certain amount of money to come from this plan and they focused on the vehicle sales and use tax because it could get them a lot of cash.
But we understand that cash will come out of the pockets of Virginia dealers and their customers. The General Assembly leadership understood that as well -- they were just more than willing to impose this increase on you and your customers.
The Governor's proposal will be acted upon by the General Assembly next Wednesday, April 3rd, at the Reconvened Session.
Thank you for all of your support in this battle. A special thanks goes out to VADA Board Chairman Rick Gallaer and VADA Legislative Chairman Karen Radley. Their leadership and support has made a tremendous difference.
CLICK HERE to track the final status of our bills.
New Transportation Plan Impact on Virginia Auto Dealers and their customers
-Update March 27, 2013-
As you know, this General Assembly session had a frustrating conclusion for the VADA, with a final transportation plan increasing the vehicle sales and use tax from 3% to 4.3%.
Since the General Assembly adjourned in late February, we have been working with the Governor's office on amendments to the bill to reduce the increase in the vehicle sales and use tax. Dealers around the Commonwealth wrote to the Governor in support of a reduction in the increase.
Monday was the deadline for the Governor to send his changes to the General Assembly.
He has proposed reducing the increase to 4.15% - maintaining the phase in over the next several years (4% July 1, 2013 with a .05 percent additional increase every July 1 thereafter until it reaches 4.15% as of July 1, 2016.)
Here is a short review of where we have been in this issue:
- The VADA had been involved in discussions on this bill for months. Proposals had been made concerning all sorts of revenue.
- A sales tax on repair labor was proposed and rejected after our input.
- The original proposal was 5.3% - making the vehicle sales and use tax to the same rate as the retail sales tax.
- We have been successful in reducing the tax rate and mitigating its impact on our dealers and their customers, from 5.3% to 4.3% in the plan that passed the General Assembly and now down to 4.15% as proposed by the Governor.
- We proposed language to exempt rebates from the tax and it was included in the bill.
The Governor has been very receptive to our concerns and was willing to further reduce the increase, but ultimately, it came down to strong opposition from the legislative architects of this plan. They made it clear that any further reduction in the vehicle sales and use tax would doom the plan. The Republican leadership in the General Assembly was simply unwilling to compromise on this issue.
This was all about the "arithmetic" (as President Clinton would say) -- the General Assembly wanted a certain amount of money to come from this plan and they focused on the vehicle sales and use tax because it could get them a lot of cash.
But we understand that cash will come out of the pockets of Virginia dealers and their customers. The General Assembly leadership understood that as well -- they were just more than willing to impose this increase on you and your customers.
The Governor's proposal will be acted upon by the General Assembly next Wednesday, April 3rd, at the Reconvened Session.
Thank you for all of your support in this battle. A special thanks goes out to VADA Board Chairman Rick Gallaer and VADA Legislative Chairman Karen Radley. Their leadership and support has made a tremendous difference.
CLICK HERE to track the final status of our bills.