CATA News

[SESCO client alert] The first challenge to the Department of Labor’s overtime rule has landed, but what the U.S. District Court for the Eastern District of Texas will do with it and how any decision will affect businesses remains up in the air.  As this litigation develops, businesses must still prepare for the upcoming July 1, 2024, salary threshold increase.

Thirteen industry associations and businesses jointly filed a federal lawsuit challenging the Department of Labor’s (“DOL”) newly updated overtime exemption rule. In the lawsuit, plaintiffs assert the DOL unlawfully overstepped its authority by passing the new overtime rule. The plaintiffs liken the new rule to the 2016 Obama-era overtime rule, struck down by a federal court on grounds the increased salary thresholds effectively created a de facto salary-only test.

There is also a separate legal challenge pending in the US Court of Appeals for the Fifth Circuit against the Trump-era overtime rule, which argues that the DOL doesn’t have the authority to consider a worker’s earnings at all when determining whether they are exempt from overtime. 

The newly filed lawsuit acknowledges that if the Fifth Circuit were to find that the DOL cannot use salary levels as part of the overtime exemption test, then the rule should also be blocked.

Recommendations

Although the lawsuit has asked for expedited consideration, employers should continue to operate under the assumption that the DOL’s overtime rule will go into effect starting July 1, 2024. To prepare for the upcoming salary threshold changes, employers should:

On May 28, 2024, Hanley Dawson III, 80, of Ketchum, Idaho, passed away at Eisenhower Hospital in Rancho Mirage, California with his wife of 58 years Catherine (Swanson) and four children by his bedside.

Dawson was born in Detroit, Michigan June 1, 1943, and met his beloved, Cathie, his freshman year at Regis College in Denver, Colorado. She attended sister school Loretto Heights College. The two married in 1965 and lived in Detroit, Michigan before moving to Chicago, Illinois in 1971 to open Hanley Dawson Cadillac in downtown Chicago with his father, Hanley Jr. In 1976, Hanley III branched out on his own and started The Patrick Dealer Group, which today is one of Chicago’s premiere luxury auto groups.

In addition to being a successful entrepreneur, Hanley was a devoted Catholic and supporter of Jesuit education. He served on the Board of Trustees of Regis College and the Board of Trustees at Loyola Academy in Wilmette, Illinois, where his two sons and three grandchildren graduated and two currently attend. His philanthropic spirit spread to the Wood River Valley in Ketchum, Idaho where he and Cathie retired twelve years ago after spending time there since 1972. He led the fundraising campaign to build the new Our Lady of the Snows church in 2007 and served on the finance committee for many years. He was a longtime supporter and board member of St. Luke’s Hospital in the Wood River Valley and volunteered and donated to The Hunger Coalition.

More than anything, Hanley loved his family and friends and cherished every opportunity to golf, duck hunt, ski and travel with the people he loved.

He is survived by his wife Cathie, his children Megan Edwards (Chris), Hanley IV (Bridget), Liz Prior, Patrick (Tami) and his grandchildren, Alex, Emilie, Duke, Sarah, Charlie, Mimi and Alton.

A Celebration of Life will be held in July in Sun Valley, Idaho. As Hanley prioritized finding joy in life and sharing it with others, the family asks that you do the same – go out and do something that brings you real joy and share with friends and family around you.

In lieu of flowers consider a donation to St Luke’s Wood River Foundation.

[From CATA Approved Partner ACV Auctions] There's no getting around it: the auto industry has been on quite a ride over the past few years. US auto dealers face a myriad of challenges that require adept navigation and strategic planning. As we move into the back half of 2024, several key issues have emerged or continue to plague dealers, demanding attention and innovative solutions. Let's explore five top challenges facing US auto dealers and strategies to overcome them.

No matter the issues that rear their head, one thing will always remain true: Auto Dealers are survivors who will always find creative solutions to power past challenges. By implementing innovative solutions and embracing digital transformation, dealers can navigate these challenges successfully and emerge stronger in an evolving market landscape.

The IRS Energy Credits Online tool lets multiple people register as users on behalf of their entity. For continuity of access to the clean energy online tools, the IRS encourages each entity to have more than one Clean Energy Officer.

Additional users are vital for continuity of access. If an entity has only one user and that person leaves, no one currently associated with the entity will have the authority to act on its behalf.

Clean Energy Officer The first person to register with IRS Energy Credits Online is automatically the entity’s Clean Energy Officer. A Clean Energy Officer can:

• Authorize additional users.
• Promote other users to Clean Energy Officer. Multiple users can have this role for the same entity.
• Assign, manage and revoke permissions, including those of other Clean Energy Officers.

Clean Energy Officers have access to all IRS Energy Credits Online functionality. They’re the only users who can manage authorized users and permissions.

Additional users Once the first user creates an account for the entity, they can share the registration link with additional users who need access to IRS Energy Credits Online. The IRS recommends having at least two Clean Energy Officers as a best practice to manage access to IRS Energy Credits Online.

User roles The Clean Energy Officer should pay close attention to these roles assigned to other users in their organization.

• Dealers or Sellers. Employees who need to submit time-of-sale reports or request advance payments.
• Manufacturers. Employees who submit periodic reports.
• Clean energy delegate. Employees of the entity who aren’t officers or other people authorized to have legal responsibility for the entity. A Clean Energy Delegate can access the pre-filing registration tool to request registration numbers the entity needs to make an elective payment election.
• Clean energy third party user. Users outside the entity’s organization. This role lets the user request registration numbers the entity needs to make an elective payment election or transfer election on the tax return.

More information:

• Publication 5902, Clean Energy Authorization Permission Management
• IRS.gov/CleanEnergy

Patrick J. Fitzgibbon, age 74, passed away peacefully on Friday, May 10, 2024, at Lightways Hospice in Joliet. He was Chairman of the CATA in 1995-96 and longtime dealer principal at South Holland Dodge.

Fitzgibbon is survived by his beloved wife, Barbara (nee Garncasz) Fitzgibbon; children, John (Mary) Fitzgibbon and Scott (Lindsay) Fitzgibbon; grandchildren, Kadyn Fitzgibbon, Sean Fitzgibbon, Olivia Fitzgibbon, and Bradley Fitzgibbon; his brother Michael Fitzgibbon; and his sister-in-law Sandra (Late Wayne) Stuart.

Fitzgibbon had a passion for cars, especially Dodges. Only one love surpassed his passion for cars, and that would be his love for his family, whom he cared for deeply. He will be greatly missed by all who knew him.

Funeral services were held privately.

Election ballots for the open positions on the CATA Board of Directors were mailed just prior to Memorial Day weekend, one per dealer and were addressed to the dealer principal on record.

In accordance with the bylaws of the Chicago Automobile Trade Association, a Nominating Committee met and selected five nominees whose name appears on the ballots. There are four directors to be elected for a term of three years beginning at the conclusion of the Annual Meeting & Golf Outing on June 11, 2024. The current directors whose terms expire but who are eligible for re-election are John Crane, Fred Marks and Jason Roberts. Additional candidates on the ballot are Karen Sutton-Ford and Jared Wickstrom

Ballots must be returned before 12:00 p.m. on Friday, June 7, 2024.

DriveChicago.com, a significant complimentary benefit to all CATA dealer members, recently launch a completely redesigned website. As before, the primary mission of DriveChicago.com is to capture in-market vehicle shoppers and deliver them to CATA member dealers. Ancillary to that is advancing CATA marketing initiatives like BBQ for the Troops, the Chicago Auto Show and Chicago Drives Electric.

Extending a more than 10-year partnership with automotive digital marketing powerhouse Automotive Internet Media (AIM), DriveChicago.com takes advantage of the latest cloud-based database management and webhosting software. The new site is more focused and extremely fast, delivering vehicle listings in the blink of an eye.

DriveChicago.com does not get in the way of the shopping experience, rather it delivers the customer right to your door. When a site user clicks a vehicle listed on DriveChicago.com, a new tab is opened displaying that vehicle on your dealership’s website. In the coming months, look for DriveChicago.com to become the No. 1 non-paid referrer in your site’s good analytics.

DriveChicago.com continues to list ONLY the new and used inventory of CATA dealer members. There are no priority, sponsored or featured listings. Vehicle search results are solely based on the users filter options. As part of the rebuild, AIM also developed a way to eliminate inventory feeds and instantly update the more than 100,000 vehicle listings on the site.

Even though the new site is live, the AIM team continues to refine dealership listings and deploy tools like WebBuy’s digital retailing tool for trade-in quotes and values. However, the biggest value of DriveChicago.com remains, driving traffic to YOUR website.

The CATA is excited to introduce SoftEdge, a new grassroots software that enables you to easily connect with your local legislators to communicate critical issues that impact your business.

In light of the Governor’s recent initiative to cap Illinois retailers’ sales tax collection allowance, we’re hoping a tool like SoftEdge will make contacting your local legislators easier and more effective. In the next week, emails will be sent to dealer principals and dealer members. Simply register for the system and note the city in which you reside as well as the one in which you do business.

Via SoftEdge, the CATA will prepopulate letters to local legislature that dealers can simply forward along or customize as desired. The goal is to get as many dealers/business owners to contact policymakers to communicate pertinent information so they can consider our side as they enact various laws.

The CATA is committed to lobbying and advocating for issues that matter to you, but we need your help (there’s power in numbers). Please contact us with any questions.

The CATA wants to make you aware of a potential change in the retailers’ sales tax collection allowance. There are currently several legislative proposals, as well as a provision in the governor’s FY 2025 budget, to cap the retailers’ collection allowance at $1,000. As of now, vendors may retain 1.75% of state sales tax collected as partial reimbursement for acting as the state’s tax collector.

In 2022, franchised new-car dealers collected $2.9 billion in sales tax for the state of Illinois. New-car dealers are currently required to submit a separate sales tax form for every vehicle sold or leased, making sales tax collection a very labor-intensive process.

The current collection allowance already falls well short of the actual work required to collect the taxes. If the reimbursement amount were to be capped at $1,000, a typical dealer would lose $60,000 per year in administrative costs. For comparison, the Illinois Department of Revenue collects a 2.17% discount on 24 different taxes it collects.

We urge you to contact your state legislator via SoftEdge (highlighted in the article above) and make them aware of this potential detrimental change to the reimbursement amount and urge them to vote NO to any proposal that could cap the current 1.75% retailers’ collection allowance .

The need for senior leadership development in the automotive space has never been more urgent. Dealerships realize that to survive in today’s volatile, uncertain, and complex environment, they need leadership skills and organizational capabilities different from those that helped them emerge as area leaders in the past.  Industry analysts find that traditional automotive training programs no longer adequately prepare executives and dealer principals for the challenges they face today and those they will face tomorrow.  Dealer principals seek the communicative, interpretive, affective, and perceptual skills needed to help them and their executive teams lead compliant, profitable dealerships.

Enter Zurich’s Advanced Leadership & Performance Seminar (ALPS), being held July 8-11 at Zurich’s North American Headquarters in Schaumburg.  Zurich’s Advanced Leadership and Performance Seminar is designed for dealership leaders and people managers.

This forum focuses on driving the performance of your teams and building a stronger culture, ultimately developing the next generation of leaders to support your organizational growth and expansion.  This is the first training of its kind, designed specifically for dealer principals, platform directors, automotive CEOs, etc. to be offered in the Chicagoland Area -- and at a dramatic discount for CATA Members. CATA dealers are eligible to take advantage of the Zurich customer rate of $2,295. Register here.