City nears end to new car dealer tax
With the hope that new-car dealers will return to Los Angeles, the City Council on Wednesday asked a measure be drafted to eliminate the business tax on their operations. Daily News.
Pushed by Mayor Antonio Villaraigosa and several members of the City Council, the proposal is designed to bring back many of the car dealers that have left the city over the past 25 years as part of an overall package of tax reforms to make the city more business friendly.
"At one time, we had 150 new-car dealers," Councilman Bill Rosendahl said. "Today, we have only 52. I agree we need to make the city more business friendly, but we also need to look at the impact."
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About The
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Los Angeles Daily News City Hall reporter Rick Orlov writes about politics on the local, state and national stage.
Car dealers have been a mighty big target for politicians and taxes for years. Most local politicians would just as soon the car dealers were out in the county somewhere. After all, car salesmen and lawyers were usually scuffling for the bottom rung on the trustworthy-ness polls.
“Every road has a turn.” was a saying from one of the local new car dealers in Kansas. The turn in this road is the insatiable hunger for taxes and car dealers generate huge amounts in taxes. They also employ a wide range of people from lot boys to accountants and yes, even lawyers.
Los Angeles woke up a few months ago and realized they chased off almost 100 car dealers in the last 25 years by levying a business tax on their operations. I wish I had solid numbers but years of experience will have to do. Let say the average new car dealer employes just 50 people. 5,000 employees. The loss in federal and state income taxes is staggering. I won’t even guess how much tax money was lost on parts, accessory and car sales by over-taxing and abusing the car dealers.
This conversation took place recently in LA, “Councilman Bill Rosendahl said he wanted to know the loss to the general fund by eliminating the taxes and what would be required to make up the loss of sales tax revenue. City Council President Eric Garcetti said he understood that the money lost would be replaced if five new-car dealerships opened.”
Is this the first step in California getting its act together?