SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS
Law and Order
Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.
Annual Inspections: Legislation has been reintroduced in the California Assembly to require annual smog-check inspections for vehicles 15 years old and older. The bill would also require that funds generated through the additional inspection fees be deposited into an account that can be used to scrap older cars. In 2004, a new law was enacted in California to require the lifetime testing of all ’76 and newer model-year vehicles. Pre-’76 motor vehicles would remain exempt under this bill. SEMA succeeded in defeating this measure in the previous two legislative sessions.
Street Rods/Customs: SEMA-model legislation that would create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the New Jersey Senate Transportation Committee. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. The bill allows a kit car or replica vehicle to be assigned a certificate of title bearing the same model-year designation the body of the vehicle most closely resembles.
Historic Vehicles: SEMA-supported legislation has been reintroduced in the New York Assembly to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The bill has been referred to the New York Assembly Transportation Committee for consideration. The $100 one-time fee would replace the current annual fee of $23.
Antique Vehicles: SEMA-supported legislation has been introduced in the Tennessee Legislature that would amend the state’s current law defining antique motor vehicles to permit use of these vehicles for general transportation purposes. Under current Tennessee law, use of antique vehicles is strictly limited to club activities, exhibits, tours and for general transportation only on Saturday and Sunday.
Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been approved by the Utah House of Representatives. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. Under the bill, kit cars and replica vehicles will be assigned certificates of title bearing the same model-year designations as the production vehicles they most closely resemble. The bill now moves to the Utah Senate for consideration.
Scrappage: On the heels of the defeat of a U.S. Congressional proposal to create a national cash-for-clunkers program, SEMA helped turn back an effort in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and be in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.
Inoperable Vehicles: For the fourth time, a bill has been introduced in West Virginia that would further restrict the ability of state vehicle hobbyists from maintaining inoperable vehicles on private property. The bill would redefine “abandoned motor vehicles” to include vehicles or vehicle parts that are either unlicensed or inoperable, or both, are not in an enclosed building and have remained on private property for more than 30 days. Under current law, the abandoned vehicle law applies primarily to vehicles on public property. The bill would make violation a misdemeanor offense punishable by substantial fines, community service and jail. SEMA has defeated all previous versions of this measure.
Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the Wyoming Legislature and signed into law by Governor Dave Freudenthal. The new law defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. The law allows kit cars and replica vehicles to be assigned certificates of title bearing the same model-year designation as the production vehicles they most closely resemble.
Economic Stimulus Tax Breaks: The $787 billion stimulus bill that President Obama signed into law earlier this year contains several provisions of direct benefit to SEMA members and their workers. Highlights include:
Bonus Depreciation: It extends a bonus depreciation already in effect, permitting businesses to immediately write off 50% of the cost of new equipment purchased in 2009.
Enhanced Small-Business Expensing: It extends a small-business expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2009 rather than recovering the costs over time through depreciation.
Five-Year Carryback: Small businesses with gross receipts of $15 million or less can carry back net operating losses for five years instead of two years. Example: A business that currently is losing money may apply these losses to a previous profitable year and then claim a refund for taxes paid that year.
Payroll Tax Credit: For 2009 and 2010, the new law provides a refundable tax credit of up to $400 for working individuals and $800 for working families, phasing out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 couples). The Treasury Department adjusted the withholding tables so that the tax credit will be included in payroll checks.
Sales-Tax Deduction for Vehicle Purchases: The new law allows consumers to take a federal deduction for state and local sales/excise taxes paid on the purchase of a new car, light truck, recreational vehicle or motorcycle through 2009. This deduction is phased out for taxpayers with an adjusted gross income in excess of $125,000 ($250,000 for couples) and applies to car loans up to $49,500.
Postage Increase: Starting May 11, 2009, the cost of a first-class stamp will rise by $.02 to $.44 for the first ounce and $.17 for each additional ounce. Other increases include: large envelopes at $.88 for the first ounce; parcels at $1.22 for the first ounce; and postcards at $0.28. Under a 2006 law, annual postal increases may not exceed the rate of inflation. Annual price adjustments for first-class mail and periodicals occur in May, and increases for other shipping services occur in January.