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Two States Considering Bills Related to Dealer Fees and Sales Tax

March 3, 2009

JEFFERSON CITY, Mo. and OLYMPIA, Wash. — Legislators in Missouri and the state of Washington are hoping to pass bills to keep car buyers in their state, but not all dealers are happy.

A bill proposed by Missouri State Representative Tim Jones would allow automobile and powersports dealers to include sales tax in their finance deal jackets. If passed, the bill would also allow dealers to issue license plates, according to Missourinet.com.

The move is aimed at making car-buying easier for consumers and to help dissuade them from visiting dealerships in neighboring states such as Illinois, Iowa and Kansas.

In Washington, dealers are asking the state legislature to allow them to triple the fee to process deal-related paperwork from $50 to $150, according to The Seattle Times.

While versions of the Washington bill are quickly making their way through the Senate and House behind the support of dealers, the Missouri Bill is being met with some dealer resistance.

Although Missouri State Rep. Jones has won the support of the Missouri Bankers Association and the Missouri Automobile Dealers Association, representatives of several smaller-scale auto and boat dealers said the bill would add unneeded expenses to their dealerships. Much of their argument centers on the possibility of having to issue license plates.

The full text of the Missourinet.com article and a summary of the bill can be found here.

In Washington, a Senate committee passed a version of the "documentary service fee" increase last week. The House is considering a similar measure.

State law currently allows auto dealerships to charge customers $50 or less to cover processing of the licensing and the vehicle excise tax, as well as other administrative costs.

Under Senate Bill 5816, Washington vehicle buyers must be informed of the fee and told that the cost is negotiable. Details of the fee must also be printed on the purchasing paperwork in an easy-to-read font.

As is the case in Missouri, Sen. Tracey Eide (D-Wash.) sponsored the Senate measure as a way to give Washington auto dealers a fair shot when competing with dealerships in Oregon and Idaho. Both Oregon and Idaho have lower business taxes, which allow them to sell their cars more cheaply, according to dealers.

A spokesman for the Washington State Auto Dealers Association, which represents more than 300 car dealerships, said they have been thinking about raising the fee for years.

"This fundamentally is a competitive issue," said Scott Hazelgrove of the Washington State Auto Dealers Association. "A dealer is simply not able to earn what a competitor does in Oregon or Idaho."

Hazelgrove said auto dealers in Oregon and Idaho can charge whatever they want in documentary service fees.

Lobbyists, however, oppose the bill. They believe the fee increase would burden consumers already struggling in a difficult economy.

Comments

  1. 1. RON VAUGHN [ March 04, 2009 @ 05:41AM ]

    HERE IN ILLINOIS WE HAVE COLLECTED THE TAXES AND ISSUED PLATES FOR YEARS. NO PROBLEM , IT WORKS GREAT.

  2. 2. Finance Monkey [ March 07, 2009 @ 07:06AM ]

    $100 dealer processing fee (not required by law) in MD and we issue tags & collect tax as well. Small lots can still issue temp tags and get the reg plates from the MVA. FYI if you buy a car out of state and register it in MD you pay the 6% tax,( tax on trade difference). No advantage to buying elsewhere. FYI dealer keeps 1.2% of collected tax gross.

 

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