Olds dealers skeptical of tax break proposal
Business First of Buffalo - by Thomas Hartley Business First
Oldsmobile dealers past and present would get a special tax break in the Senate version of a big trade bill.
The issue has generated controversy in some quarters, including within the auto industry, and even some dealers, such as Kevin Campbell, president of Glen Campbell Chevrolet-Oldsmobile in Amherst, have some reservations.
"Some people took a pretty big hit on this thing and it would be help for them. You wonder about a precedent for special protection for small groups of businessmen. There probably are a lot of other people faced with somewhat similar issues," he said.
Dealers were essentially blindsided by General Motors in December 2000 when the carmaker announced that it was discontinuing the Olds brand in 2004.
To ease the pain, GM agreed to "termination assistance payments" to dealers that were based on individual dealer's Oldsmobile sales and what percentage of their business they represented.
Dealers could accept a lump sum payout immediately or half of it up front and the other half later. If they accepted the entire amount, they had to leave the business. Those taking half of their buyout could continue selling Olds but had to stop when they accepted the rest of what they were owed.
The provision in the Senate version that favors Olds dealers would defer the tax that they owed on their second half buyout if it was reinvested in another franchise. The tax wouldn't be owed until that property was sold.
Other Western New York dealers, such as Chris Braun, general manager of Braun Cadillac Saab in Depew, say they don't know much about the issue.
"I haven't paid a lot of attention and haven't sorted it out. I'm no different than anybody else, though. If it means I pay less tax, then I'm for it. But I'm not banking on it becoming reality," Braun said.
There's no guarantee that the Senate version will be part of the final bill which is expected to be enacted by the end of this year.
Even Rob Braziel, a lobbyist for the National Automobile Dealers Association, which has advocated the Oldsmobile tax break since 2001, acknowledges the difficulties.
"This has been a difficult bill, particularly in the House, to get passed. I think the question is: Are there going to be efforts to keep some of the more focused pieces like ours in the final bill which my gut tells me will be more likely not be decided until after the election but before the end of the year," he said.
"But clearly, a lot of folks lost all their business and for many, it was something that they devoted their lives to," he said.
It has been reported that congressional staffer estimate that the Oldsmobile provision would cost the Treasury $189 million over 10 years. NADA says that estimate is far too high.
But critics, when they complain about giveaways to businesses, often cite the Oldsmobile measure as one of the worst examples.
"I personally question how politically popular protecting auto dealers will be in the grand scheme of things. We generally are not the people that they feel terribly sorry for under ordinary circumstances,' Campbell said. "I'd like to see it happen, but I don't know....."
Latest News |
Most Viewed Stories |
Most Emailed Stories |
