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September 2009

Dealerships Should Start Tax Planning Early to Cash In on 2009 Benefits

Auto dealerships are approaching the final quarter of a year that has been marked by some of the biggest economic challenges in the industry’s history.

As consumers and businesses deal with the recession, sales of new light vehicles were down 32 percent through July 2009 compared with July 2008. That continued a downward sales trend that began in 2007. Another development that is impacting the entire economy, as well as the industry, is that manufacturers are requiring almost 2,000 dealerships to close.

Amid these problems, dealerships are continuing to seek ways to minimize tax obligations and gain extensions on some required tax payments. Dealerships that do not expect to be profitable in 2009 are seeking additional ways to obtain deductions for years in which they return to profitability.

This year's new tax law and other tax laws and rules provide dealerships with opportunities to achieve those 2009 savings and long-term tax advantages.

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The purpose of this newsletter is to provide general information on tax, audit and other issues related to the automobile dealership industry.  The information contained herein may not apply to all businesses or organizations and their specific circumstances.  Dealerships are encouraged to consult directly with an accounting expert before making tax and accounting decisions.