MASSACHUSETTS STATE AUTOMOBILE DEALERS ASSOCIATION

UPDATE

Peter Brennan, Esq.MSADA Staff Attorney

• MSADA represents the interests of over 400 franchised new car andtruck dealers in the Commonwealth.

• MSADA’s primary focus is to be the dealers’ voice before state, federal,and local governing bodies and administrative agencies as well as allpublic and media outlets.

• Extensive lobbying efforts on Beacon Hill and in Washington, D.C.• MSADA also promotes dealers’ compliance with federal and state laws

and regulations through educational programs, endorsement services,seminars/webinars, governmental outreach, and industry publications,including our legal bulletins, newsletters, and monthly magazine.

Driving Massachusetts’

Economy

50,832 total jobs (direct and

indirect) created by MA dealerships

62 employees per dealership on

average$21.3B in total

sales

$626M in state and income taxes paid.

Current Federal Legislative PrioritiesOppose Tariffs – No vehicle is 100% made in the USA. Tariffs will hurt all dealers due to increased prices, stifled demand and lost jobs.

Automated Vehicles (AVs) – Two bills in play on the federal level – SELF DRIVE Act in House and AV START Act in Senate. Early draft of legislation included language inserted by OEMs that would pre-empt state franchise laws. Advocated for language preserving state franchise laws which was adopted by committee and passed by the House.

Oppose Overly Broad Recall Legislation – legislation would prevent the retail of any used vehicle with an open recall. Would create “trade-in tax” on consumers without improving safety.

Repeal Federal Excise Tax on Heavy Duty Trucks – Originally enacted to pay for World War 1.

Recent Federal Legislative Accomplishments – Tax Reform

Floor Plan Interest Deductibility – Original tax reform bills disallowed interest deductibility, including floor plan financing, for interest expenses exceeding 30 percent of adjusted taxable income. The final tax package that was signed into law (H.R. 1) preserved 100 deductibility on vehicle floor plan interest on a permanent basis.

Other priorities advocated by MSADA, such as doubling the estate tax exemption, preserving LIFO and maintaining the deductibility of advertising expenses were also include in final law.

Tax Reform 2.0• President Trump expected to lead push for additional changes to

the tax code.

• GOP wants to push for additional comprehensive tax relieflegislation while Democrats want to repeal the recently passedreforms.

• Expect the mid-term elections to provide some clarity on this front– Elections Have Consequences.

Election Preview

• In Mass. all constitutional officers, including governor, and alllegislators are up for re-election – 160 reps and 40 senators.

• At federal level – all 9 congressional offices and one US senator(Warren).

• Governor Charlie Baker, with nation-best 70% approval rating,will likely cruise to re-election.

• Democrats will continue to control the state house and senate by awide margin.

• Two new members of the MA congressional delegation – seatsformerly belonging to Rep. Tsongas and Rep. Capuano.

Massachusetts Legislative Shifts • With democrats maintaining a huge majority in the MA house

and senate, it is likely that both bodies will continue to shiftideologically leftward.

• House Ways and Means Chair Jeff Sanchez was recentlydefeated by a primary challenger because he was not seen as“liberal enough” for his district.

• As state democrats worry more about a primary challenge fromthe left than a republican opponent, expect more legislation thatis popular with the far-left fringes of the party.

• New formal session will being in January 2019, however, billscan still be passed during the “informal” sessions.

State Legislative Advocacy

• 90% of MSADA’s advocacy is aimed at killing bills that would beharmful to our dealers – or making sure that they are never filed inthe first place.

• Recent Examples:

• Documentary Preparation Fee limits

• Expansion of Lemon Law

• Preservation of Trade-In Allowance

New Massachusetts Laws from 2017-2018 Session

• Grand Bargain – Comprehensive legislation increasingminimum wage and affecting premium pay and paidfamily and medical leave.

• Massachusetts Pay Equity Act – went into effect on July 1,2018

• Massachusetts Pregnant Workers Fairness Act – Went intoeffect on April 1, 2018.

THANK YOU pbrennan@msada.org