Washington DC – Today marks a special day for visiting auto dealers from Colorado who held their Washington meeting on the eve of the National Auto Dealer Association Washington Conference. ASSET was proud to participate.
Among the many issues being considered by the Board and members is the estate tax and comprehensive tax reform. September is the traditional month for association visits to members of Congress. It is a challenging time of year to get the attention of lawmakers as the end of the fiscal year approaches and spending measures quickly become the order of the day.
Most auto dealers are private business, small and medium sized, who face a challenge in raising and maintaining enough capital to fund the cost of carrying inventory for consumers. Dealers pay for vehicles before they are even shipped from the manufacturer, they are not on consignment. On paper dealers look like they have a lot of assets. The reality is that many dealers are extremely vulnerable to the estate tax, even with the current exemption level.
Dealers are a people intensive operation with a lot of inventory: vehicles, tools, equipment. They generally operate in single purpose buildings with large amounts of land on which to store and display inventory. Prime targets of an estate tax, much like a farm or ranch. But unlike farms or ranches that may receive a reduced valuation because of some current laws, dealerships are exposed. And since they are franchise agreements, putting them into a trust to protect against an estate tax is all but impossible.
ASSET has been talking with groups like auto dealers across the country. The ASSET solution to the estate tax changes the debate and immediately eliminates the harm caused by the current collection method. Death is no longer a taxable event, meaning that no job is in jeopardy. Jobs are saved, no lives disrupted. Yet the government takes no risk and maintains the same cash flow.
Most car dealers are entrepreneurs who are used to problem solving on their own. It is no wonder that ASSET has found much support among car dealers and farmers who see sometimes the best idea is the simplest one.