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FEBRUARY 2015 Information and Insight for Florida Used Car Dealers

The FIADA is 75 years in the making, and we are just getting started!

Check out your Association’s past, present and future as it continues to serve Florida’s independent dealers.

FULTON, MO PERMIT NO. 38

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2 — Independent Dealer —February 2015

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Dealer Independent

MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308

TELEPHONE (850) 385-2712 (800) 237-0448

FAX (850) 385-3251

WEBSITE www.FIADA.com EXECUTIVE COMMITTEE Jim Winterick, Sr.

President

Paul Matton

Senior Vice President

Dino Mercurio

Chairman of the Board

Contents February 2015

For members of the Florida Independent Automobile Dealers Association

C O L U M N S & F E AT U R E S 4

President’s Message Jim Winterick, Sr.

6

Executive Director’s Message Lisette Mariner

Christopher Leedom

Regional Vice President

8

FIADA Town Hall Meeting

Steve Marbais, CMD

Regional Vice President

10

Member News

Brad Joel

Secretary Lisa Compagno

Treasurer Scott Lanier

Regional Vice President

Phil Risley

Regional Vice President

Govinda Romero

Regional Vice President

FIADA STAFF Lisette Mariner

Executive Director Terry Myers

Educational Instructor Jason Berthiaume

Education and Marketing Coordinator

Amelia Tillman

Membership Director Christy Taylor

Editorial/Advertising

POSTMASTER:

Send address changes to

FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Toll Free: (800) 237-0448 Fax (850) 385-3251 • www.FIADA.com The Independent Dealer is a publication of: Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308 The magazine is published every month in Tallahassee and distributed to Florida new, used, wholesale and lease/retail car dealers.

Advertising rates are available upon request.

The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Independent Dealer or the Association. Likewise, the appearance of advertisers, or their identification as members of FIADA, does not constitute an endorsement of the products or services featured.

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12 FIADA:1981-1990

Let the 75th Anniversary begin! FIADA kicks off a feature celebrating the

history of the Association.

14

Let’s Make History...Again!

Registration is now open for the 75th Annual FIADA Convention and Trade Show in Lake Buena Vista.

16

Legislative Update FIADA Lobbyist Sandra Mortham

18

Win a Trip to Vegas You can earn a free NIADA Convention registration and a chance at a FREE trip to vegas with FIADA’s new membership recruitment contest.

20

Florida Sales Tax: Cash or Accrual Basis?

Some good rules and reminders about how and when to report sales tax.

24

It’s Time to Renew Your Continuing Education Choose In Person or Online FIADA courses to get your CE credits instantly.

26

A Look at Current Legal Issues The monthly round-up of federal and legal issues affecting auto dealers.

30

Industry News

UPCOMING EVENTS May 8, 2015 FIADA Town Hall Meeting • 10am -2pm Jupiter, FL

July 10, 2015 FIADA Town Hall Meeting • 10am -2pm Cocoa Beach, FL February 2015 — Independent Dealer — 3

FROM THE PRESIDENT

The Acronyms are Calling

BY JIM WINTERICK, SR., FIADA PRESIDENT

S

o there you are busily conducting your day. Buying, selling, reconditioning, motivating, counseling, budgeting, checking your capital needs, planning ad campaigns, solving customer problems, and all the other duties encompassed in the Independent Dealer. On top of taking care of our families wants, needs and desires. Of course our own personal ambitions, what about them?

Suddenly the Acronyms come calling.

would happen? We would be alone. Easy pickings for those whose solutions for their problems is found in our wallet.

There is one source that can unscramble the acronyms and that is the FIADA. Dealers working for Dealers.

Volunteering their precious time for the benefit of our shared profession. The next time you are at an auction

There is one source that can unscramble the acronyms, You know the Acronyms: DMV, DOR, AG, IRS, CFPB, ACA, FBI, and that is the FIADA. Dealers working for Dealers. etc., etc.,etc., apparently there is Volunteering their precious time for the benefit of our no limit to their insatiable desires shared profession. to monopolize our precious time.

What do we do? It is my experience that most dealers’ first call is to the and see a fellow dealer that is involved in the Association only entity that represents all Independent Dealers. The let them know your appreciation for their commitment. acronym that is in our corner, on our side helping, working And get involved yourself. It’s not their Association, it’s for the Independent Dealers of Florida. The FIADA that’s our Association. We are all in this together. Join the team. who we call. I know, for me I want the Association to be Stand with your fellow dealers to better our profession for there. I want their help and support. The guidance, the ourselves and those to come. knowledge, the experience that only Independent Dealers working for Independent Dealers can have. Our combined It is the livelihood we have chosen. I can’t think of anything experience, and expertise have a value that is priceless at else I would sooner be doing than being an Independent times like these.

Dealer in the great state of Florida.

But what if there was no Association? No one to support the So my question is, who are you going to call when the Independent Dealer. No one to represent our interests in acronyms come calling on you?

Washington, Tallahassee, our county, or our local level. No one to explain our business to those that think they know Jim Winterick, Sr. what is best? No one to explain in an understandable way FIADA President for legislators the practicality of our business. Then what 4 — Independent Dealer —February 2015

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February 2015 — Independent Dealer — 5

EXECUTIVE DIREC TOR’S MESSAGE

What If?

BY LISET TE MARINER, EXECUTIVE DIREC TOR

E

ver wonder, what if the FIADA wasn’t here? I would shudder to think of such a thing. Since 1940, the FIADA has had the best interest of the dealer at heart. The Florida Independent Automobile Dealers Association, Inc., known as the FIADA, is a not-for-profit Florida corporation that was organized in 1940 to represent and support the interests of independent used car dealers. We were organized by dealers, for dealers.

The FIADA was established out of the need for a common ground for independent car dealers to learn how to be successful; to protect themselves from unfair and unnecessary regulations; to exchange ideas; and to educate the public and the law makers of the importance of the industry to the general public.

a minimum and sponsored legislation that made it possible for dealers to protect themselves against unknown out of state liens. In 1995, it was the used car lemon law that was rearing its ugly head. FIADA has fought diligently to protect the dealer’s rights.

Through the years, FIADA has also made a commitment to educate dealers. In the 60’s it was sales tax refunds for repossessions, today it’s the ever changing compliance landscape.

With the dedication of dealers around the state, FIADA has been able to be here for you! I cannot imagine what it would be like if we weren’t.

The mission of the FIADA is to anticipate, recognize and respond to the members’ need With the dedication of dealers around the state, for education, information and resources. To FIADA has been able to be here for you! I cannot support and assist members in understanding imagine what it would be like if we weren’t. and complying with regulatory issues.

To advocate fair legislation on behalf of independent dealers and their customers.

To increase membership. To promote a Code of Ethics. To enhance the image of the used car dealer.

As we celebrate our 75th Anniversary, I would like to thank our To improve customer confidence and satisfaction. FIADA’s Board and the dealers of years past that have paved the way. commitment to the mission will enable its members to increase When I look forward at the next 75 years, and all the potential their profitability and business success. issues and objectives that may come our way, I’m reminded of that famous WWII poster that we’ve used on the cover of this Let’s take a walk down memory lane. In 1957, the FIADA was issue. We can do it! We can, and will, continue to be the voice there for dealers. During the long battle for dealer licensing, and protector of Florida’s Independent Dealers. Past, present FIADA ensured that dealers were protected. We killed bills and future. that put a cap on dealer’s reserves, held sales tax increases to 6 — Independent Dealer —February 2015

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February 2015 — Independent Dealer — 7

It was another packed house at the January Town Hall meeting in Ft. Myers.

Leedom Group’s Jon Leedom presents.

Executive Director Lisette Mariner welcomes the group.

Town Halls cover a variety of topics.

A panel of privacy experts answers attendee’s questions

Friday, May 8, 2015 • 10:00am - 2:00pm Jupiter Resort & Spa • Jupiter, FL 5 North A1A, Jupiter, Florida 33477 8 — Independent Dealer —February 2015

Save the date for the next Town Hall meeting. Find out more, or register online at www.FIADA.com www.fiada.com

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February 2015 — Independent Dealer — 9

MEMBERSHIP NEWS

New Members

JANUARY 2015

Renewing Members

JANUARY 2015

C HAMM ENTERPRISES Brandon, FL Carl Wilson, Jr. Sponsor: FIADA

MAXWELL MOTORS Largo, FL Kevin Maxwell Sponsor: FIADA

50+ Year Members Manheim’s St. Pete Auto Auction 40+ Year Members Manheim’s Lakeland Auto Auction, Inc.

Lakeland, FL

CARL WILSON AUTO SALES Jacksonville, FL Carl Wilson, Jr. Sponsor: FIADA

MOTOR POINT AUTO SALES Orlando, FL Leonedis Pena Sponsor: FIADA.com

30+ Year Members Credit Cars Manheim Pensacola

Orlando, FL Pensacola, FL

CENTRAL FLORIDA EXPORTS Fruitland Park, FL Byron Oldham Sponsor: Hometown Auto Sales

OLDFIELD AUTO SALES Venice, FL Joy Oldfield Sponsor: FIADA

CHARLES SHELL, JR. Clearwater, FL Sponsor: Terry Myers

PRE-LOVED AUTOMOTIVE Tampa, FL Erica Rosado Sponsor: DMV

COASTAL AUTO RANCH, INC. Port St. Lucie, FL Lori Kinney Sponsor: Kevin Scott DEALERRATER Waltham, MA Andrew Chase Sponsor: FIADA DRIVERS CHOICE MOTORS, INC. Longwood, FL Michael Colon Sponsor: Jennifer Finlay FELIX HERRERA Hialeah, FL Sponsor: Terry Myers INTERNATIONAL CAR BUYERS, LLC Saint Petersburg, FL Bill Kalyuas Sponsor: Paul Matton JOSEPH KNIGHT Sarasota, FL Sponsor: Terry Myers MANHEIM JACKSONVILLE Jacksonville, FL Sean Lord Sponsor: Sarah Langley

SHASLAND, LLC Ocala, FL Mirza Masud Sponsor: FIADA SMART CHOICE AUTOS Ormond Beach, FL Arnie Green Sponsor: FIADA.com TOMMY & PEGGY SUMPTER Fort Pierce, FL Terry Myers VEGTER AUTOMOTIVE Cape Coral, FL Margrit Vegter Sponsor: FIADA WES PULLIN AUTOMOTIVE BY DESIGN LLC Winter Garden, FL Jennifer Pullin Sponsor: Terry Myers YOUR WHEELS AUTO SALES Brandon, FL RBY Rodriguez Sponsor: FIADA

10 — Independent Dealer —February 2015

20+ Year Members Manheim Tampa Manheim Daytona Beach R & L Auto Wholesale

Clearwater, FL

Tampa, FL Daytona Beach, FL Lakeland, FL

10+ Year Members Auto Add-Ons, Inc. Automotive Fleet Enterprises Car-Time, Inc. Donny Mills Auto Sales, Inc. Galeria Auto Mart, Inc. Manheim’s Central Florida Auto Auction Manheim Orlando Ultimate Image Auto, Inc.

Tavares, FL Pinellas Park, FL Bunnell, FL Largo, FL Apopka, FL Orlando, FL Ocoee, FL Tallahassee, FL

Under 10 Year Members A & J Mobility Inc., dba Mobility Express Adesa Auto Auction of Tampa Autoflex, LLC College Auto Sales of Fl, LLC Diamond II Auto Sales, Inc. FH Equipments, Inc. Fisher & Phillips, LLP Freeland Moore dba Harbor Nissan Goldstar GPS guided by Spireon Greenlight Motors, LLC Larry’s Auto Service Center Manheim Fort Lauderdale Manheim Fort Myers Manheim Palm Beach MNS Auto, LLC Najjar Auto Mall, Inc. dba Park Auto Mall National Dealer Services NextGear Capital Paul Yoder Auto Sales, Inc. The Connection Motors, Inc. United Consumer Finance, Inc. Victory Auto, Inc.

Ruskin, FL Tampa, FL Gainesville, FL Miami, FL Orlando, FL Orlando, FL Ft. Lauderdale, FL Port Charlotte, FL Knoxville, TN New Port Richey, FL Beverly Hills, FL Davie, FL Fort Myers, FL West Palm, FL Daytona Beach, FL Pinellas Park, FL Jacksonville, FL Carmel, IN Sarasota, FL Hialeah, FL Middleboro, MA Naples, FL

Rejoining Members

JANUARY 2015

FIRST LEASING CORP Miami, FL Arsenio Moussa Sponsor: Frank Fuzy

PINELLAS MOTORS, INC. St. Petersburg, FL Jason Jagdeo Sponsor: Lisette Mariner www.fiada.com

VALDO AUTO SALES CORP. Miami, FL Carlos Valderrama Sponsor: Amelia Tillman

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VEHICLE CLEARING HOUSE Winter Garden, FL Rick Knapp

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February 2015 — Independent Dealer — 11

The History of

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Independent Dealer magazine continues its recap of the Association’s history, leading up to the 75th Anniversary this October.

verything was booming in the 1980s, including FIADA membership. After a lot of focus on membership recruitment through prizes and contests, the FIADA hit a record number of 1,410 members in 1984, coming so close to their goal of 1,500.

The FTC disclosure window sticker was the hot topic in the eighties, as the FTC’s proposed rule would require a disclosure statement to be placed in the window of cars for sale, recording whether or not the vehicle passed certain inspections. FIADA members raised their voices loudly hoping to get the attention of senators and NIADA Lobbyists, sounding the message that the new required inspections would raise the price of used vehicles as much as $400, and would ultimately cost millions in legal fees and settlements if the car failed to perform under the inspection’s “implied warranty.” At first, the sticker was voted down, but when it was reworded and came back in 1981, it was passed. The end result, after vetos from Congress and a ruling from the Supreme Court, was that the window sticker would include three things: a warning that spoken promises are hard to enforce and any promise should be in writing, a prominent statement explaining what is meant by the term “as is” and a listing by the dealer of any warranties provided with their terms. These “Buyer’s Guides” that were first mandated in May 1985 are still required today.

FIADA also fought the first round of the curbstoner fight by helping to pass a “curbstoner bill” written to guard against unlicensed dealer sales. They were also successful in killing a “lemon” law, which would have required dealers to pay for any repairs a vehicle needed within 30 days after the purchase and costing 20 percent or more of the purchase price.

An office building on Edgewater Drive in Orlando was purchased in July 1983 after the Board of Directors approved the decision.

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LET US HEAR IT!

We want to invite you to share your memories and be a part of the 75th Anniversary Celebration. Help us compile a history of not only factual information, but also the stories and spirit that have shaped the FIADA for so many years. Post your favorite memories or photos on Facebook or twitter and use #FIADA75.

12 — Independent Dealer — —February December 2015 2014

www.fiada.com

o

The growing legislative clout brought new attention to FIADA from dealers who were not members yet.

Through a series of “FIADA Days” hosted around the state by the auto auctions, FIADA officers and members went on a recruiting spree in 1985. The hard work paid off, and by 1986 FIADA was the largest independent auto dealers association in the country when it passed 2,000 members. In 1988, at 2,261 members, FIADA was twice the size of any other NIADA affiliate.

FIADA’s Ladies Auxiliary was first founded in 1976 by wives of FIADA Board Members. The group focused on charitable fundraising and held a variety of events including raffles, bazaars and contests.

Their first large donation was made in 1980, when the Ladies Auxiliary presented a check for $2,000 to the Tallahassee Home for Battered and Abandoned Children, providing the group with a new school bus.

1986

winners in the President’s The ladies adopted Citation Program for Private the Lighthouse Children’s Sector Initiatives. FIADA Home as their special was presented with the project in 1982, and raised Stueben Glass Tetrahedron $10,000 for them by the Award at a ceremony at the time the convention in White House. The citation Daytona Beach came program was created to around. Children from the recognize outstanding Home were in attendance, community involvement along with the Director Rev. projects sponsored by Lindy McGowan, to accept businesses, trade associations the donation. The kids and professional societies. performed a special song FIADA was chosen for its to show their appreciation. efforts with the Lighthouse Within minutes after the Children’s Home as well song, convention attendees as raising thousands of began making impromptu dollars to help finance an donations of $500, $1,000 educational recreation even $5,000 to add to the building at the Faith original donation. In only Children’s Home in Tampa.

10 minutes, an additional $12,000 was raised, bringing the total donation to $22,000.

The work of the Ladies Auxiliary was honored in July 1987 when President Ronald Reagan recognized them as one Displaying the “C” flag received from of the top 30 the President’s Citation Award.

1988

1987

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FIADA reorganizes into 15 districts, based on geographical regions.

FEBRUARY 1982 Gov. Bob Graham declares “automobile week” in honor of FIADA.

JULY 1983 FIADA Board of Directors vote to buy new FIADA office building in Orlando.

JANUARY 1987 FIADA gets its toll free number at (800) 237-0448 that will serve as a hotline for dealers.

NOVEMBER 1987 FIADA hires John Culbreath as its Lobbyist in Tallahassee.

JULY 1988 Board votes to increase annual dues to $150 per year.

OCTOBER 1988 A satellite FIADA office is open in Miami for Spanish-speaking dealers.

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RELIVING HISTORY You will also want to check out the new video that features the FIADA story. The video was unveiled for the first time at the FIADA Annual Convention and captures the uniqueness of the Association as told by its members and volunteers. You can watch it on our YouTube channel or scan the QR code on this page. www.fiada.com

December February 2014 2015 — Independent Dealer — 13

(800) 237-0448

14 — Independent Dealer —February 2015

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February 2015 — Independent Dealer — 15

L E G I S L AT I V E U P D AT E

Curbing the Curbstoners

BY SANDRA MORTHAM, FIADA LOBBYIST

T

he countdown is on to the 2015 Florida Legislative session, which is scheduled to start on March 3. The FIADA has been planning and preparing and is ready to go when the gavel pounds.

Of course, if you are encountering curbstoning issues in your area, you can notify the Department at any time. Below is the proper procedure for reporting curbstoning violations as well as the region offices contact information.

One of the items on the agenda is getting the $100 curbstoning fine increased to $500. FIADA members are well aware of the continued problem with curbstoners, and we have been making progress towards “curbing” it. As you recall, it was back in 2010 when the Automobile Dealers Industry Advisory Board recommended imposing the $100 fine which Florida passed in Statute Section 318.18.

REPORTING CURBSTONERS Report violations to the Department of Highway Safety and Motor Vehicles through the Bureau of Field Operations.

When you find a vehicle you suspect is being curbstoned, contact your DMV Regional Office in writing with the following information:

There has been progress since then. In the first three quarters of the 2013-2014 fiscal year, the Division of Motorist Services reported 1,653 curbstoning investigations, 830 unlicensed dealer investigations and 138 vehicles towed. That was almost three times the number that were towed for the entire 20122013 year. The Department was able to investigate close to 2,000 unlicensed dealer cases in that time. It is estimated that between the lost registration fees, sales taxes and licensing fees, the state lost over $1 million in revenue.

After much discussion and analysis of the problem, the FIADA and the Automobile Dealers Industry Advisory Board are suggesting raising the curbstoning penalty to $500. Promoting this effort will be a legislative priority this session, so be ready to show your support where needed.

You probably don’t have to be reminded that contributing to the FIADA PAC Fund is an excellent way to show your support. You can use the form on page 17, or go online to www.FIADA.com and make a contribution.

16 — Independent Dealer —February 2015

• • • •

Specific location where vehicle(s) were or are being offered for sale.

Dates that the vehicle(s) were or will be offered for sale.

Contact information for the person filing the complaint.

Any other data that may aid in the investigation such as name or telephone number displayed on the vehicle

The information can be emailed to the Regional Offices at the following: Region 1, Margate: dmvregion1@hsmv.gov Region 2, Ocala: dmvregion2@hsmv.gov Region 3, Jacksonville: dmvregion3@hsmv.gov Region 4, Deland: dmvregion4@hsmv.gov Region 5, Orlando: dmvregion5@hsmv.gov Region 6, Tampa: dmvregion6@hsmv.gov Region 7, Tallahassee: dmvregion7@hsmv.gov Region 8, Palmetto: dmvregion8@hsmv.gov Region 9, West Palm Beach: dmvregion9@hsmv.gov Region 10, Miami: dmvregion10@hsmv.gov www.fiada.com

SUPPORT THE FIADA PAC FUND! Your PAC Contribution helps spread awareness and gain support of issues affecting independent dealers in the state’s capitol.

CONTRIBUTION INFORMATION Contributor’s Name:_________________________________________________________________________ Dealership/Company:________________________________________________________________________ Street Address, City, State, Zip:____________________________________________________________________

q

Check q

q

$500

Credit Card (one time contribution) q q

Credit Card Information:

$250 q

q Visa

$100 q

q

MasterCard

Monthly Credit Card Contribution (until cancel)

$50 q

q

$25

q

American Express

_________ q

Discover

PAYMENT INFORMATION Name on Card: Card number: Exp Date:

Sec. Code:

Billing Phone:

Billing Address Authorized Signature

Make your check payable to FIADA-PAC and mail to: FIADA • 1840 Fiddler Court • Tallahassee, FL 32308 If making payment via credit card, you may fax your contribution form to 850.385.3251

www.fiada.com

February 2015 — Independent Dealer — 17

Recruit at least 5 new members before April 30, and you could win a trip to Vegas and a free registration to the 2015 NIADA Annual Convention.

5 Members = 1/2 off NIADA Registration

The rules are easy:

10 Members = free NIADA Registration

Recruit 10 new members for FIADA, and you’ll get a code for a FREE NIADA Convention Registration.

5 members enters you for a chance to win the free trip!

Recruit 5 new members for FIADA, and you’ll get a code for 50% off your NIADA Convention Registration.

When you recruit 5 new members for FIADA, you’ll also be entered into a drawing for a chance to win a complete Vegas package that includes: • Airfare to Las Vegas (1 coach ticket)

Contest ends APRIL 30, 2015

Go to www.FIADA.com for more info!

18 — Independent Dealer —February 2015

• Single Registration for the NIADA Convention • 4 night stay at Caesar’s Palace www.fiada.com

The Florida Department of Revenue is initiating a statewide audit campaign against Florida used car dealers, starting late summer 2014. The Department obtained DMV records of all used cars sold in Florida and is comparing these records against sales tax returns filed by used car dealers. Based on this information, the Department will estimate what taxable sales should have been for each used car dealer and initiate desk audits, full audits, and criminal investigations based on the level of estimated underreporting. These estimates can be erroneous and do not take into account financing charges, repossessions, sales to out of state residents, or other factors that can affect sales tax. Even worse, it only takes $301 of collected but not remitted sales tax to face felony charges and up to 5 years in jail under FL law.

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www.fiada.com

February 2015 — Independent Dealer — 19

SALES TRAINING

Florida Sales Tax: Cash or Accrual Basis?

BY JAMES SUT TON, CPA, ESQ.

It’s a topic that always seems to create great debate for auto dealers. Here are a few rules and reminders of what to do.

W

hile the age old question of what comes first – the chicken or the egg – gets much more press, the question of whether Florida sales tax should be accounted for on the cash or accrual basis is probably more important to most Florida business owners. Unfortunately, the question is often not raised by anyone until the Florida sales tax auditor comes a knocking. This purpose of this article is to answer the cash or accrual basis question once and for all. Unfortunately, as with most things sales tax related, the answer is not a simple yes or no answer. The answer depends on the type of transaction.

to pay for the delivery. Two, you have to pay the sales tax. This simple, real life example teaches us the general rule that Florida sales tax should be accounted for on the accrual basis.

THE GENERAL RULE So when the contract is signed, sales tax is usually due right then and there – i.e. Accrual Basis. However, unlike Rooms to Go, not all businesses require their customers to pay sales

tax when the contract is signed. So even if your customers do not pay for 30, 60, or even 90 days, the selling vendor must account for and remit the sales tax for the month when the contract was entered into. Industries with extended payments terms can be dramatically affected by this rule.

The construction industry is a prime example.

A lumber yard sells $30,000 of lumber to a general contractor on June 15th, with 45 day payment terms. The customer does not pay the $30,000 or the $1,800 of sales tax (presuming 6% sales tax rate) until July 30th. However, the vendor must file and remit the sales tax related to this sale no later than July 20th (19th if the business files electronically) even though the lumber yard has not even collected the tax at that point. This can be a huge financial burden on some industries, but it is the law and the penalties can get very expensive for not remitting the sales tax timely.

If you remit tax for a customer that never pays you, or does not pay the full amount due, then you can take a bad debt credit on your sales tax return.

If you have ever bought furniture from Rooms to Go, then you probably remember that while the company runs great advertising campaigns offering “no payments and no interest for 36 months,” the fine print requires you to pay two things when you sign the contract for your furniture to be delivered. One, you have 20 — Independent Dealer —February 2015

But what if the customer never pays you? You have been forced to pay sales tax that you never collected? This is a very good question.

If you remit tax for a customer that never pays you, or does not pay the full amount due, then you can take a bad debt credit on your sales tax return. The down side is that you must take this bad debt credit within 12 months of writing off the debt. So if you have been remitting sales tax for years on transactions that you never received full payment, you only www.fiada.com

get to go back 12 months from the date you wrote off the bad debt.

Industries that can be heavily affected by this rule are ones that tend to repossess often. The first industry that usually comes to mind on repossessions is car dealers. The Buy Here, Pay Here car industry is booming, but it has many sales tax complications. Worthy of note, while you are entitled to take a repossession credit for sales tax not collected, the FL DOR heavily scrutinizes any credits taken on sales tax returns.

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Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm Moffa, Gainor, & Sutton, PA. Mr. Sutton’s primary practice is Florida tax controversy, with a almost exclusive focus on Florida sales and use tax. Visit the website at www.floridasalestax.com. As always, consult your CPA for tax advice as it relates to your business.

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800 VEHICLES

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Sales tax on rent is computed on the cash basis. If the tenant does not pay rent, then you do not have to remit sales tax.

This exception will even catch sales tax auditors off guard occasionally. So if you collect rents in Florida, then make sure your business properly accounts for sales tax on the cash basis, but only for rent. Everything else subject to sales tax in Florida should be accounted for on the accrual basis.

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FIADA Webinar: Thursday, March 26 10:00am - 11:00am

Free for FIADA Members $10.00 for Nonmembers

Local SEO for Auto Dealers – How to Win Google Rankings Race with Greg Gifford

Register at www.FIADA.com February 2015 — Independent Dealer — 21

22 — Independent Dealer —February 2015

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2015 — Independent Dealer — 23 www.fiada.com LOW RATES • FAST RELIABLE SERVICE • FLORIDA BASED •February FAMILY OWNED & OPERATED

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February 2015 — Independent Dealer — 25

LEGAL ROUND-UP

A Look At Current Legal Issues

BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO, HUDSON COOK, LLC

A monthly collection of selected legislative and regulatory highlights, and a recap of some of the many auto sale and financing lawsuits followed each month.

LITIGATION Arbitration Denied where Merger Clause in RISC without Arbitration Superseded Purchase Agreement with Arbitration: Car buyers signed a retail purchase agreement containing an arbitration clause. They also signed a retail installment sale contract that did not contain an arbitration clause, but included a merger clause stating that the RISC contained the entire agreement. The buyers sued the dealership for violating Florida’s Deceptive and Unfair Trade Practices Act in connection with electronic titling/registration filing fees charged to its customers. The dealership moved to compel arbitration, and the trial court denied the motion, concluding that the RISC, with no arbitration clause, superseded the retail purchase agreement. The Court of Appeal of Florida affirmed, agreeing with the trial court that no agreement to arbitrate existed because the merger clause in the RISC rendered the retail purchase agreement’s arbitration clause nugatory. See HHH Motors, LLP v.

Holt, 2014 Fla. App. LEXIS 19710 (Fla. App. December 3, 2014).

California Courts Discuss Claims Arising from Sale of “Certified” Car: Three cases we report on this time discuss claims against a dealership arising from the sale of “certified” cars. In each case, the buyers claimed that the dealership put, in the car’s glove box, a Certified Quality Inspection Certificate, which consists of a generic list of components that were inspected but not the results of the inspection.

They claimed that the dealership violated California’s Consumers Legal 26 — Independent Dealer —February 2015

Remedies Act, Unfair Competition Law, and Vehicle Code § 11713.18(a) (6), which prohibits a dealer from describing a car as “certified” if, “[p] rior to the sale, the dealer fails to provide the buyer with a completed inspection report indicating all of the components inspected.” In one case, the U.S. District Court for the Southern District of California denied the dealership’s motion to dismiss.

The court found that the buyer had standing to bring her claims because she sufficiently alleged that she lost money or property when the dealership advertised her vehicle as “certified” without providing her, prior to the sale, a completed inspection report as required by Section 11713.18(a)(6). See Zambrano v. CarMax Auto Superstores, LLC, 2014 U.S. Dist. LEXIS 166285 (S.D. Cal. December 1, 2014). In the second case, the U.S. District Court for the Eastern District of California dismissed the complaint, finding that the buyer lacked standing because she did not allege an injury. She did not allege that an inspection did not occur or was insufficient; she merely complained that she did not receive the proper paperwork. Moreover, she did not support her claim that she overpaid for the car merely because it was deemed “certified.” See ChulickPerez v. CarMax Auto Superstores California, LLC, 2014 U.S. Dist.

LEXIS 167000 (E.D. Cal. December 2, 2014).

The U.S. District Court for the Eastern District of California dismissed the third case. The court found that the buyer lacked standing to bring claims related to receiving a generic inspection certificate rather than the authentic record of

the inspection because she did not plead injury. She did not allege that the car was not inspected but merely complained that she did not receive the inspection checklist. Although the court found that the buyer had standing to bring claims alleging that the dealership made affirmative misrepresentations and fraudulent omissions regarding the history and condition of the vehicle, the court nevertheless dismissed these claims because the allegations did not meet heightened pleading standards for fraud. See Sigala v. CarMax Auto Superstores, LLC, 2014 U.S. Dist.

LEXIS 158743 (E.D. Cal. November 10, 2014).

Service Contract Properly Included in Amount Financed Where Service Contract Purchase Not Required for Financing: When a buyer bought a car from a dealership, she also bought GAP protection and a service contract. The buyer claimed that she did not want to buy the service contract but that she was told that its purchase was required in order to obtain financing.

The buyer sued the dealership for violations of the Truth in Lending Act, alleging that the service contract charge should have been included in the finance charge, rather than in the amount financed disclosure, because it was payable incident to the extension of credit. The U.S. District Court for the District of Minnesota granted summary judgment for the dealership. The court found that even if the dealership stated that the service contract was a condition of financing, the documents the buyer signed in connection with the truck purchase stated otherwise. The service contract itself stated that purchase of www.fiada.com

2014 U.S. Dist. LEXIS 168693 (D. Minn. December 5, 2014).

Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLC. (410) 865-5411 or www.counselorlibrary.com.

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the service contract was not required in order to buy or finance the vehicle.

The Product Price and Payment Disclosure for Installment Sales also stated that finance terms and approval were not conditioned on the purchase of the service contract. See Salvate v.

Automotive Restyling Concepts, Inc.,

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February 2015 — Independent Dealer — 27

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28 — Independent Dealer —February 2015

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2014-2015 FIADA EXECUTIVE COMMITTEE:

JIM WINTERICK, SR. President Gulfstream Motor Credit Miami, FL (305) 253-2335

PAUL MATTON Senior Vice President Park Auto Mall Pinellas Park, FL (727) 639-1112

DINO MERCURIO Chairman of the Board Independent Credit, Inc. West Palm Beach, FL (561) 686-8673

LISA COMPAGNO Treasurer Palm Tree Auto Sales Stuart, FL (772) 288-2099

BRAD JOEL Secretary Splish Splash Auto Sales Princeton, FL 33032 (305) 258-1191

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February 2015 — Independent Dealer — 29

INDUSTRY NEWS 2015 Business Confidence and Dealer Survey

The National Independent Automobile Dealers Association is compiling data for the 2015 Business Confidence and Dealer Member Survey. The survey results will be released quarterly, as well as combined together with the Dealer Member results compiled and published in the 2015 Used Car Industry Report (UCIR) and released at the NIADA 69th Annual Used Car Industry Convention & Expo.

This is a priceless tool for comparing your stats and sales with other dealers nationwide and also serves as a benchmark for industry data NIADA provides to regulators, legislators and other entities needing data on the used motor vehicle industry.

NIADA encourages dealers to complete the short survey online at http://www.niada.com/survey.php.

The more responses that are received means the more precise the collective data will be.

Motor Vehicle Retail Installment Sellers were required to renew their license before December 31. If you missed that deadline, you have six months to reactivate your license otherwise, you will have to reapply.

FIADA’s Winterick Appointed to Repair Council In an official letter signed by Commissioner of Agriculture Adam Putnam, FIADA President Jim Winterick received the news that he had been appointed as a member of the Motor Vehicle Repair Advisory Council. He will remain a member through November 30, 2018.

The purpose of the Advisory Council is to review the rules relating to the Florida Motor Vehicle Repair Act. The Council also advises the Department on matters relating to advancements in industry standards and practices and consultation on technical issues that promote better consumer protection in the motor vehicle repair industry.

Southeastern Auto Auction Breaks Records

Southeastern Auto Auction of Savannah held its Grand ReOpening & $10,000 Cash Giveaway Sale on Jan. 21. The sale featured over 900 vehicles consigned and over 500 dealers in attendance, both new records for the auction.

By the end of the day every previous record had been broken and three dealers each walked away with a piece of the $10,000 Giveaway. (Vaden Chevrolet $5000, JAK Auto Sales $3000, Redding’s Auto Mart $2000).

“I want to thank every dealer who helped make this the most successful sale in Southeastern Auto Auction’s history. I also want to thank the SEAA team, which I am very proud of,” stated Bill McCready the company’s V.P.

The sale also kicked off the countdown to the auctions “Cars, Cash & Caring Sale” which will be held on March 4th. The auction teamed up with Shriners Hospital for Children and will be placing a donation for every transaction made now thru March 4th. The Cars, Cash & Caring Sale will feature $30,000 in Cash & Prizes for dealers and a donation check presentation to Shriners Hospital for Children.

Don’t forget to Like us on Facebook! Check out our page and follow us at www.facebook.com/FLIndAutoDealersAssoc 30 — Independent Dealer —February 2015

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February 2015 — Independent Dealer — 31

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32 — Independent Dealer —February 2015

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