Pub. 17 2018-2019 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 7 new jersey auto retailer W W W . N J C A R . O R G President’s MESSAGE | BY JAMES B. APPLETON Governor Phil Murphy’s Administration has set off on a course that many dealers find troubling. Not only has the Governor advocated for (and signed into law) tax increases, he’s actively pushing for public policies that will drive up the cost of doing business in New Jersey — as if it wasn’t already expensive enough. Consider the following: Millionaire’s Tax: The 2018-2019 State budget signed by Governor Murphy raises taxes on millionaires AND successful businesses. The Millionaire’s Tax raises the tax rate on those earning more than $5 million per year, up from the Governor’s original proposal to raise rates on those earning more than $1 million. This tax will hit owners of many small and medium size businesses hard, including many retail auto dealerships. Corporate Business Tax (CBT) Surcharge: A surcharge to the CBT on companies that earn more than $1 million per year was also included in the budget. Businesses making less than $1 million per year, as well as S-Corporations, LLCs and partnerships (including most new car dealerships) were exempt from the surcharge. Paid Sick Time: The legislation was signed into law in early May and guarantees paid sick leave to nearly 1 million private- sector employees across New Jersey. The new law is a burden to businesses, but it could have been worse. The original proposal would have allowed employees to earn up to 72 hours of paid sick leave. The final bill allows employees to earn up to 40 hours annually and gives employers the ability to "black out" certain dates. Equal Pay Act: This legislation, which also passed earlier this year, presents a legal and management nightmare for businesses. Given the potential liability and the sensitivity of this issue, NJ CAR strongly recommends that dealers work with a skilled employment law attorney to conduct an initial assessment of their “Equal Pay Act compliance” and identify potential vulnerabilities. And that’s just what’s happened so far… Coming soon are pushes to increase the minimum wage, the potential legalization of marijuana and other public policy changes that will likely drive up the cost of doing business in New Jersey even more! Businesspeople may feel like they are under siege when it comes to public policy positions of the Murphy Administration. But I feel strongly that NJ CAR and its dealer members can work with this Administration on a variety of critical issues , including workforce development, electric vehicle (EV) incentives, outdated advertising regulations and illegal brokering. We have already had very productive meetings with the Governor’s Office, Motor Vehicle Commission (MVC) , Division of Consumer Affairs (DCA) and the Department of Environmental Protection (DEP) , all of which have been very receptive to addressing some issues that have long been headaches for franchised dealers. In a meeting early this year, First Lady Tammy Murphy was enthusiastic when dealers floated the idea of a public-private partnership to grow dealership jobs in New Jersey because workforce development and job training will be a major focus of this Administration. In a meeting with the DEP, the Administration recognized dealers are the key to greater EV adoption and expressed a willingness to develop incentive programs and invest in infrastructure to boost the number of EVs on New Jersey roads. NJ CAR also met with the DCA regarding our concerns with the motor vehicle advertising regulations, which have changed little in nearly 40 years. NJ CAR was invited to propose revisions that acknowledge the unique role the Internet plays in auto retail advertising and marketing and we are awaiting feedback from the Division on those suggested revisions. Finally, after years of complaints, it appears the DCA and the MVC may finally do something about illegal brokering and the many rules and regulations ignored by these fly-by-night operations that harm consumers. The auto retailing industry may disagree with the Murphy Administration on many public policy issues, but I have been very encouraged that they view dealers as an essential constituency and critical part of the New Jersey economy. That is a foundation that we can build on during Phil Murphy’s tenure as Governor. NJ CAR Engages With Murphy Administration On Key Dealer Issues