CATA News

Profitability is at the forefront of every General Manager’s mind. How profitable is your service department? What can you and your managers do to increase revenue?

We’ve found that most General Managers and Fixed Ops Directors primarily think about “more”, selling more cars, servicing more cars, and selling more parts. What often gets overlooked is the optimization and getting better at selling, marketing, and pricing their parts and services.

Dynatron Software has leveraged our proven methods to develop the following list designed to enable your service department to increase its revenue. If you aren’t already doing what is listed here, we have the tools to help!

Dynatron Software combines best-in-class technology and expert coaching to help our customers find revenue leaks, identify new revenue opportunities, and increase Customer Pay ELR.

PriceSmart, our foundational solution, makes complex DMS data easily digestible, thus actionable for optimizing price, maximizing ELR, and improving profitability. Dynatron’s solutions are powered by our advanced analytics platform ROI Suite (Repair Order Insights) which identifies the hidden revenue opportunities. Our expert coaches leverage proven processes and best practices to turn business intelligence into measurable results. All dealerships will benefit from the services we offer, from a single rooftop to a large automotive group.

Want to learn more about the hidden opportunities in your service department? Check out the latest Dynatron blog post to learn more.

Elective pay allows applicable entities, including tax-exempt and governmental entities that would otherwise be unable to claim certain credits because they do not owe federal income tax, to benefit from some clean energy tax credits. By choosing this election, the amount of the credit is treated as a payment of tax and any overpayment will result in a refund.

Applicable entity eligibility

Applicable entities can use elective pay. Applicable entities include:

How to receive the elective payment
For an eligible entity to receive an elective payment, they need to take the following steps:

After the pre-filing registration process is complete and the requirements for the applicable credit have been satisfied, the eligible entity can claim and receive an elective payment by choosing the election on their annual tax return along with any form required to claim the relevant tax credit.

Applicable entities need their own Employee Identification Number (EIN) or Tax Identification Number (TIN) to complete the pre-filing registration process. Applicable entities that don’t otherwise have a filing requirement cannot use or borrow the EIN of a related entity.

Eligible credits:

The Chicago Automobile Trade Association (CATA), Chicagoland’s new-car dealer association, recently donated $1,500 to the Chicago Community Works and Sports Alternative. The donation came via the CATA’s Chicagoland Dealers Care program in conjunction with a $5,000 donation by Pugi Auto Group of Downers Grove. Through Chicagoland Dealers Care, the CATA matches up to $1,500 of a member dealer’s donation to local charitable organizations.

The Chicago Community Works and Sports Alternative was founded in 1991 as an anti-gang and drugs organization for students after school. One of the most well-known programs that Community Works and Sports Alternative produces is the Chicago Jokers football team, which greatly benefits from these donations by providing equipment and transportation for students on the football team. Many Jokers return to coach the team, and some even go on to have a professional football career. Most recently, Jokers alumni Jayden Reed was drafted by the Green Bay Packers in the second round of the 2023 NFL Draft.

In addition to the Chicago Jokers football program, the organization also supports students through etiquette and mentoring programs. There are currently more than 80 students participating throughout the organization.

“We are proud to provide these students a safe place to come together,” said Eric McLendon, Chicago Community Works and Sports Alternative founder and president. “Now they have the courage and resources to say ‘no’ when faced with questionable decisions.”

The CATA has been a longtime supporter of local nonprofit organizations. Since its inception in 2008, the grassroots Chicagoland Dealers Care program has donated more than $125,000 to local charitable organizations. Additionally, since 1992, the association has raised more than $60 million for Chicago-area charities during the annual First Look for Charity black-tie event, traditionally held the evening before the Chicago Auto Show opens to the public. 

“The CATA’s Chicagoland Dealers Care program makes our member’s donation dollars go further and also highlights the positive impact that new-car dealers have within their communities,” said CATA Chairwoman Kelly Webb Roberts. “We applaud local dealers like Pugi Auto Group for their very generous contributions to supporting their community.”

For more details on the Chicagoland Dealers Care program, please visit www.ChicagolandDealersCare.com.

Dealers should be aware of a recently passed amendment to the Illinois Consumer Fraud and Deceptive Business Practices Act (Section 2PP), which will become effective January 1, 2024. The amendment regulates mailings which contain a request that the recipient call a phone number. The language states:

It is an unlawful practice…to knowingly mail or send or cause to be mailed or sent a postcard or letter to a recipient [in Illinois] if the postcard or letter contains a request that the recipient call a telephone number; and the postcard or letter is mailed or sent to induce the recipient to call the telephone number so that goods, services, or other merchandise [as defined in the Act] may be offered for sale to the recipient; and the postcard or letter does not disclose that goods, services, or other merchandise…may be offered for sale if the recipient calls the telephone number.

We urge dealers to be aware, and to inform their advertising agencies and direct mail companies of this new provision in the law.

The Chicago Automobile Trade Association (CATA), Chicagoland’s new-car dealer association, recently donated $1,500 to the Chicago Community Works and Sports Alternative. The donation came via the CATA’s Chicagoland Dealers Care program in conjunction with a $5,000 donation by Pugi Auto Group of Downers Grove. Through Chicagoland Dealers Care, the CATA matches up to $1,500 of a member dealer’s donation to local charitable organizations.

The Chicago Community Works and Sports Alternative was founded in 1991 as an anti-gang and drugs organization for students after school. One of the most well-known programs that Community Works and Sports Alternative produces is the Chicago Jokers football team, which greatly benefits from these donations by providing equipment and transportation for students on the football team. Many Jokers return to coach the team, and some even go on to have a professional football career. Most recently, Jokers alumni Jayden Reed was drafted by the Green Bay Packers in the second round of the 2023 NFL Draft.

In addition to the Chicago Jokers football program, the organization also supports students through etiquette and mentoring programs. There are currently more than 80 students participating throughout the organization.

“We are proud to provide these students a safe place to come together,” said Eric McLendon, Chicago Community Works and Sports Alternative founder and president. “Now they have the courage and resources to say ‘no’ when faced with questionable decisions.”

The CATA has been a longtime supporter of local nonprofit organizations. Since its inception in 2008, the grassroots Chicagoland Dealers Care program has donated more than $125,000 to local charitable organizations. Additionally, since 1992, the association has raised more than $60 million for Chicago-area charities during the annual First Look for Charity black-tie event, traditionally held the evening before the Chicago Auto Show opens to the public. 

“The CATA’s Chicagoland Dealers Care program makes our member’s donation dollars go further and also highlights the positive impact that new-car dealers have within their communities,” said CATA Chairwoman Kelly Webb Roberts. “We applaud local dealers like Pugi Auto Group for their very generous contributions to supporting their community.”

For more details on the Chicagoland Dealers Care program, please visit www.ChicagolandDealersCare.com.

New light-vehicle sales in July increased year over year for the 11th straight month. July 2023’s SAAR of 15.74 million units was up 18.3% from July 2022. Through July 2023, the total light-vehicle SAAR rose 13.6% compared with the same period in 2022. According to Wards Intelligence, fleet deliveries in July 2023 represented 15.4% of new-vehicle sales, down from 18% the month before.

Governor Pritzker signed HB 2204 which establishes a tax credit for users of clean hydrogen in the state of Illinois. This new law creates a tax credit of $10 million per year in 2026 and 2027 for users of clean hydrogen. At the conclusion of the tax credit, the Illinois Environmental Protection Agency will conduct a comprehensive study to evaluate both the emissions impact of the tax credit and the national landscape to recommend additional policy measures to ensure Illinois remains competitive in the clean hydrogen economy and meets the clean energy goals outlined in the Climate and Equitable Jobs Act.

The chip shortage is still impacting vehicle supply, experts say, but automakers are now having to reckon with the battery supply chains as an even bigger headwind. Challenges surrounding electric vehicle production and the battery supply chain are finally materializing for legacy automakers and impacting their bottom lines.

Ford, GM, and Porsche pointed to delays, constraints, and expenses related to EVs and their batteries in recent financial results. These issues are not only causing them to fall short of their ambitious electrification targets but also impacting their balance sheets.

Ford CEO Jim Farley said during the company's last earnings call that with regard to EVs, "pricing pressure has dramatically increased in the past 60 days." Much of that stems from an EV price war brought on by Tesla and Elon Musk. One of the biggest reasons it's more difficult for a company like Ford to lower its EVs prices is because it hasn't yet hit production scale in the same way Tesla has, especially when it comes to batteries, which would bring down overall costs.

Visit Business Insider for more.

What’s new: In an ongoing effort to curb abuse of the Employee Retention Tax Credit, the IRS recently released a Generic Legal Advice Memorandum (GLAM) to further stress the strict requirements for claiming the Employee Retention Tax Credit (ERTC) based on a full or partial suspension of business operations related to supply chain disruptions.

Background: The ERTC is a refundable credit against certain employment taxes paid by businesses impacted by the COVID-19 pandemic. To claim it, a dealership must have experienced either:

Why it matters: The GLAM addresses the first criterion (first bullet above) by describing several scenarios that do not satisfy the requirements for claiming the ERTC. Its analysis specifies that, to claim the ERTC based on a supplier’s inability to deliver critical goods and materials, a taxpayer must show that a qualifying governmental order caused the supplier and the taxpayer to suspend their business operations.

Certain promoters have pushed ineligible businesses to claim the ERTC based on supply chain disruptions that are tangentially related to the COVID-19 pandemic. The GLAM makes clear that the IRS takes a strict view on this type of ERTC claim and IRS Commissioner Danny Werfel reiterated this message recently, noting that the IRS is working aggressively to address a flood of fraudulent and erroneous ERTC claims. Several CPAs have also expressed concern to NADA about the exposure of dealers who claim the ERTC based on a full or partial suspension of their operations.

In an ongoing effort to curb abuse of the Employee Retention Tax Credit, the IRS recently released a Generic Legal Advice Memorandum (GLAM) to further stress the strict requirements for claiming the Employee Retention Tax Credit (ERTC) based on a full or partial suspension of business operations related to supply chain disruptions.

Background: The ERTC is a refundable credit against certain employment taxes paid by businesses impacted by the COVID-19 pandemic. To claim it, a dealership must have experienced either:

Why it matters: The GLAM addresses the first criterion (first bullet above) by describing several scenarios that do not satisfy the requirements for claiming the ERTC. Its analysis specifies that, to claim the ERTC based on a supplier’s inability to deliver critical goods and materials, a taxpayer must show that a qualifying governmental order caused the supplier and the taxpayer to suspend their business operations.

Certain promoters have pushed ineligible businesses to claim the ERTC based on supply chain disruptions that are tangentially related to the COVID-19 pandemic. The GLAM makes clear that the IRS takes a strict view on this type of ERTC claim and IRS Commissioner Danny Werfel reiterated this message recently, noting that the IRS is working aggressively to address a flood of fraudulent and erroneous ERTC claims. Several CPAs have also expressed concern to NADA about the exposure of dealers who claim the ERTC based on a full or partial suspension of their operations.

What’s next: NADA encourages dealers that have claimed the ERTC based on a supply chain disruption, or that are considering doing so, to share and discuss the GLAM with their tax advisor.

Go deeper: Read the IRS GLAM on ERTCs