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We are pleased to announce that the Annual Meeting Luncheon will be held at the Hyatt Regency Minneapolis at the end of the Nicollet Mall on Friday, Dec. 5. The fourth floor ballroom at the Hyatt is fabulous and there’s ample parking in the ramp attached to the hotel. The event was originally scheduled to take place at the DoubleTree by Hilton in Bloomington. However, they informed us two months away from our Annual Meeting date, that they had accidentally double-booked our meeting space. Needless to say, MADA will never againr do business with the DoubleTree by Hilton in Bloomington. Nonetheless, the MADA staff is putting together the elements of another great meeting including the opening video, (you won’t want to miss it) and this year we are introducing a silent auction to benefit the MADA Foundation. Fun, awards and a keynote by columnist and opinion leader Fred Barnes will also be a part of the event’s agenda.

NewsOctober 2014

insideNMVTIS to Avoid Salvage Title

Taxable Maintenance Contracts

Care with Campaign Materials

Update on Shop Lein

Scott Lambert, Executive Vice President • 200 Lothenbach Ave. • West St. Paul, MN 55118 • (651) 291-2400 • 1-800-652-9029 • FAX (651) 291-2894

visit www.mada.org

for details, registration and a complete list of Upcoming Events and

Training

MADA News

Annual Meeting Moves Back Downtown

upcoming events

Registration is now open at www.mada.org

12nov

12nov

22oct

October 2014 / Page 2

The Minnesota Automobile Dealers Association is a non-profit trade association dedicated to the progress of the retail auto

industry in Minnesota.President Morrie Wagener, Morrie’s Automotive Group, Minnetonka President-Elect Greg House, House Chevrolet, Stewartville Treasurer Mike Saxon, Inver Grove Ford Lincoln, Inver Grove Heights Secretary Rick Jensen, Jensen Motors, Inc., New Ulm Executive Vice President Scott Lambert, MADA

200 Lothenbach Avenue • West St. Paul, MN 55118Metro: 651-291-2400 • Toll Free: 800-652-9029

FAX: 651-291-2894 • Web site: http://www.mada.org

MADA News

Dealers Support Dunwoody GalaThe Minnesota Dealer community was among many industries that turned out on October 4 to help celebrate Dunwoody Institute at its 100th Anniversary Gala at the Minneapolis Hilton. Nearly 1,000 attendees gathered to honor the Minneapolis institution. The event was chaired by our own Morrie Wagener. WCCO-TV Anchor Jason DeRusha emceed the event, which featured an appearance by Belinda Jensen and a Live Auction that raised over $125,000 to benefit Dunwoody Institute.

It’s a bad day when a dealer finds out that Driver & Vehicle Services unexpectedly branded the title for a vehicle that he sold as “salvage” or “rebuilt.”Most MADA members don’t deal in salvage vehicles and try hard to distance themselves completely from their sale. They inspect the vehicles that they buy. They require customers to certify that any trade-in vehicle has not had an insurance salvage history. They run CarFax or AutoCheck vehicle history reports. And of course they look for existing brands on the titles of vehicles that they purchase.Even taking all these precautions, it’s possible to be blindsided.NMVTIS is the acronym for the National Motor Vehicle Title Information System which is a federal government database of information about a vehicle’s title, odometer history, brand history, insurance total loss reporting and theft data. NMVTIS is becoming increasingly important as more states and more insurers are reporting data to the entity. Minnesota is one of 37 states fully participating in the NMVTIS Program.

In most cases there are no surprises. When Minnesota processes a duplicate title application or an application based on an out-of-state certificate of title, it routinely clears the transaction through the NMVTIS database. However, if the NMVTIS record shows that a vehicle was declared a total loss by an insurance company, DVS will brand the title - even if the out-of-state title does not display a brand.Dealers who want to avoid any chance of a problem should check with one of the NMVTIS record vendors. There’s more information about NMVTIS at www.vehiclehistory.gov

Legal News

DVS Adds Title Brands From NMVTIS Database

This map represents state motor vehicle titling agencies’ level of compliance with NMVTIS. These state agencies have separate responsibilities and reporting requirements under the NMVTIS rules and regulations than do other reporting entities, such as, junk/salvage yards and insurance carriers. Per the NMVTIS rules and regulations, state compliance includes providing data to NMVTIS, making title inquiries, and paying user fees.

Currently, 96% of the U.S.

DMV datais represented in the system*

37 States Participating−states that provide data and inquire into the system before issuing new titles7 States Providing Data Only−states providing data but not making inquiries

7 States in Development (includes the District of Columbia)

State Motor Vehicle Administration Overall Compliance

AK

HI

OR

WA

ID

MT

WY

ND

SD

NE

KS MO

IA

MN

WI

IL INOH

MI

UTCO

NV

AZNM

TX

OK

KY

AR

LA

MS

TN

AL GA

SC

NC

FL

VAWV

MD

VTNH

MA

CTRI

NJ

ME

DEWashington, DC

CA

NY

PA

*Based on the most current Federal Highway Administration Data (2012)

October 2014 / Page 3

Some dealers and their DMS vendors are still struggling to properly document and collect sales tax when they sell a motor vehicle maintenance contract.

In late 2012, the Minnesota Department of Revenue announced a change in how retailers must charge sales tax when they sell optional maintenance contracts for a separate charge.

Here’s a link to Revenue Notice 12-12 dated November 26, 2012. http://bit.ly/ZCmw62

Long-standing Minnesota Revenue policy had been to treat maintenance contracts as tax exempt when sold, but then charge out applicable sales/use tax in the service department when the maintenance work was performed.

That changed. Retailers - including dealers - who sell maintenance contracts must now collect sales tax up front. Correspondingly, no sales/use tax is due when the maintenance work is performed.

Revenue Notice 12-12 only applies to optional maintenance contracts which are sold for a separate charge. It does not apply to warranties or maintenance plans that are built into the price of a vehicle. It also does not apply to service

contracts sold for a separate charge that are designed to protect the customer from defects in the vehicle and unexpected repair costs.

The Department of Revenue took the unfortunate position that all taxable prepaid maintenance contracts are subject to the Minnesota general sales tax at the 6.875% rate plus local sales tax applicable in the dealer’s location. It doesn’t matter whether the prepaid maintenance contract is sold as part of the vehicle transaction or sold outside the deal. This obviously complicates documenting maintenance contract charges and taxes when the contract is sold along with a vehicle. There are also two remittance paths. Motor Vehicle Sales Tax is remitted to the Deputy Registrar. General Sales Tax is remitted directly to the Department.

Maintenance contracts are the only obvious aftermarket dealer product that creates this awkward duality. The Department distinguishes taxable rustproofing and sealants where a product is physically attached to the vehicle at the time of sale. Rustproofing and sealant products sold with a vehicle continue with the Motor Vehicle Sales Tax percentage rate and remittance path via the Deputy Registrar.

Legal News

Maintenance Contracts Tax Dealers’ Patience

MADA News

Ambassador Grants presented by andThe NADA Foundation, established in 1975, is the philanthropic arm of NADA. Funds contributed by new car and truck dealers and friends of the industry are granted to provide emergency disaster relief, financial support to colleges and universities and community service programs. One of the many programs in the Foundation is the Ambassadors Program. To become an Ambassador, a dealer, company, association or individual pledges a tax-deductible donation of $10,000 to the Foundation in their own name or in recognition of loved ones, living or deceased. Ambassadors are then eligible to present a $1,500 grant every third year in perpetuity. This year was both GMADA and MADA’s turn to award one of these earned grants. MADA Board President Morrie Wagener chose Dunwoody College of Technology as the recipient. GMADA President Steve Whitaker chose St. Paul Technical College as the recipient. Each received a check for $1,500.

Since 1975, more than $1 million has been given to private/independent colleges and universities to assist students in obtaining an education.

October 2014 / Page 4

On one of the most spectacular fall days of the year, the picture-perfect weather was just one of the many highlights of the Council’s 2nd Annual Pheasant Hunt. With a bigger crowd than last year, the combination of successful pheasant hunting, shooting clays, great food and wonderful camaraderie was the perfect combination for another fun and memorable event. The photos tell part of the story. Watch for the 2015 date, coming soon!

Collision and Service Council News2nd Annual Pheasant Hunt

Collision & Service Council

Click here to check out the full photo album at http://www.madacsc.org/

October 2014 / Page 5

Minnesota New Retail Car and Light Truck RegistrationsMost Recent Two Months YTD thru Aug.* YTD Market Share (thru Aug.)*

7/13 &8/13

7/14 &8/14*

%change 2013 2014

%change 2013 2014 change

Industry Total 37,192 42,215 13.5% 136,631 141,716 3.7%Cars 15,625 16,471 5.4% 57,898 54,590 -5.7% 42.4 38.5 -3.9Light Trucks 21,567 25,744 19.4% 78,733 87,126 10.7% 57.6 61.5 3.9

Japanese Brands 13,732 15,473 12.7% 46,550 49,863 7.1% 34.1 35.2 1.1Toyota 5,413 5,822 7.6% 17,879 18,150 1.5% 13.1 12.8 -0.3Honda 3,825 4,053 6.0% 12,902 13,187 2.2% 9.4 9.3 -0.1Nissan 2,078 2,228 7.2% 7,006 7,544 7.7% 5.1 5.3 0.2Other 2,416 3,370 39.5% 8,763 10,982 25.3% 6.4 7.7 1.3

Domestic Brands 18,266 21,201 16.1% 70,815 73,912 4.4% 51.8 52.2 0.4General Motors 7,730 8,601 11.3% 29,810 29,791 -0.1% 21.8 21.0 -0.8Ford 6,403 7,103 10.9% 25,757 25,660 -0.4% 18.9 18.1 -0.8Chrysler 4,104 5,440 32.6% 15,120 18,313 21.1% 11.1 12.9 1.8Other 29 57 96.6% 128 148 15.6% 0.1 0.1 0.0

European Brands 2,403 2,517 4.7% 9,302 8,535 -8.2% 6.8 6.0 -0.8Volkswagen 1,260 1,342 6.5% 4,600 4,244 -7.7% 3.4 3.0 -0.4BMW 467 494 5.8% 2,354 1,940 -17.6% 1.7 1.4 -0.3Mercedes 362 425 17.4% 1,248 1,442 15.5% 0.9 1.0 0.1Other 314 256 -18.5% 1,100 909 -17.4% 0.8 0.6 -0.2

Korean Brands 2,791 3,024 8.3% 9,964 9,406 -5.6% 7.3 6.6 -0.7

35.3%

23.8% 23.0%

-6.9% -8.7% -9.3%

-1.1% -2.5% -4.9% -4.8%

2.2%

8.1%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14*

% c

hang

e vs

. yea

r ear

lier

Last month in period

10.1%

10.7%

2.2%

-5.7%

-15.0% -5.0% 5.0% 15.0% 25.0%

U.S.

State

Cars

Trucks

Minnesota Auto OutlookCovering the Minnesota automotive market Data thru August 2014

Released by:Minnesota AutomobileDealers Association

Data InformationAll data represents new vehicle retail registrations in Minnesota and excludes fleet and wholesale transactions. Please keep in mind that monthly registration figures can occasionally be subject to fluctuations, resulting in over or under estimation of actual results. This usually occurs due to processing delays by governmental agencies. For this reason, the year-to-date figures will typically be more reflective of market results. Data Source: Polk.

Percent Change in Three Month Moving Average of New Retail Registrations versus Same Period Year Earlier

The graph above provides a clear picture of the trending direction of the state market. It shows the year-over-year percent change in the three month moving average of new retail light vehicle registrations. The three month moving average is less erratic than monthly registrations, which can fluctuate due to such factors as the timing of manufacturer incentive programs, weather and title processing delays by governmental agencies.*Figures for August 2014 were estimated by Auto Outlook. Data Source: Polk.

Brands included above: Domestic Brands: GM (Buick, Cadillac, Chevrolet, and GMC), Ford (Ford and Lincoln), Chrysler (Chrysler, Dodge, and Jeep). Japanese: Toyota (Toyota, Lexus, and Scion), Honda (Honda and Acura), Nissan (Nissan and Infiniti), Other (Mazda, Mitsubishi, and Subaru). European: VW (Audi, Bentley, Porsche, and Volkswagen), BMW (BMW, Rolls Royce, and MINI), MB (Mercedes Benz and smart), Other (Aston Martin, Ferrari, Fiat, Jaguar, Land Rover, Lotus, Maserati, and Volvo). Korean: Hyundai and Kia.*Figures for August 2014 were estimated by Auto Outlook. Data Source: Polk.

Percent Change in State and U.S. New Retail Light Vehicle MarketsYTD ‘14 thru August* vs. YTD ‘13

The graph above compares the change in new retail car and light truck registrations in both the state and U.S. markets. *Figures for August 2014 were estimated by Auto Outlook.Data Source: Polk.

October 2014 / Page 6

MinnesotaNew Retail Light Vehicle Registrations

Registrations Market share

YTD '13thru Aug

YTD '14thru Aug* % change

YTD '13thru Aug

YTD '14thru Aug*

TOTAL 136,631 141,716 4%Acura 1,028 1,100 7% 0.8% 0.8%Audi 937 1,167 25% 0.7% 0.8%BMW 1,841 1,588 -14% 1.3% 1.1%Buick 2,718 2,606 -4% 2.0% 1.8%Cadillac 996 962 -3% 0.7% 0.7%Chevrolet 21,285 21,049 -1% 15.6% 14.9%Chrysler 2,854 2,345 -18% 2.1% 1.7%Dodge 4,761 4,829 1% 3.5% 3.4%FIAT 225 195 -13% 0.2% 0.1%Ford 25,020 24,940 0% 18.3% 17.6%GMC 4,811 5,165 7% 3.5% 3.6%Honda 11,874 12,090 2% 8.7% 8.5%Hyundai 4,661 4,447 -5% 3.4% 3.1%Infiniti 527 570 8% 0.4% 0.4%Jaguar 32 41 28% 0.0% 0.0%Jeep 3,499 5,971 71% 2.6% 4.2%Kia 5,303 4,957 -7% 3.9% 3.5%Land Rover 251 221 -12% 0.2% 0.2%Lexus 1,409 1,583 12% 1.0% 1.1%Lincoln 737 696 -6% 0.5% 0.5%Mazda 2,889 3,092 7% 2.1% 2.2%Mercedes 1,232 1,408 14% 0.9% 1.0%MINI 513 352 -31% 0.4% 0.2%Mitsubishi 616 1,381 124% 0.5% 1.0%Nissan 6,479 6,954 7% 4.7% 4.9%Other 206 167 -19% 0.2% 0.1%Porsche 143 174 22% 0.1% 0.1%Ram 4,006 5,200 30% 2.9% 3.7%Subaru 5,171 6,532 26% 3.8% 4.6%Tesla 56 69 23% 0.0% 0.0%Toyota 16,470 16,563 1% 12.1% 11.7%Volkswagen 3,520 2,886 -18% 2.6% 2.0%Volvo 561 416 -26% 0.4% 0.3%

0.0 5.0 10.0 15.0 20.0

Buick

Volkswagen

Mazda

Hyundai

Dodge

Kia

GMC

Ram

Jeep

Subaru

Nissan

Honda

Toyota

Chevrolet

Ford

2.0

2.6

2.1

3.4

3.5

3.9

3.5

2.9

2.6

3.8

4.7

8.7

12.1

15.6

18.3

1.8

2.0

2.2

3.1

3.4

3.5

3.6

3.7

4.2

4.6

4.9

8.5

11.7

14.9

17.6

Market Share

YTD '14 thru Aug*

YTD '13 thru Aug

Minnesota Auto Outlook Data thru August 2014

This report is sponsored by the Minnesota Automobile Dealers Association and produced by Auto Outlook (800-206-0102).

Auto Outlook, Inc. is not responsible for management decisions based on the con-tent of Minnesota Auto Outlook. Copyright Auto Outlook, September 2014.

Reproduction, including photocopying of this publication in whole or in part, is prohibited without the express permission of Auto Outlook, Inc. Any material quoted must be attributed to Minnesota Auto Outlook, pub-lished by Auto Outlook, Inc. on behalf of the Minnesota Automobile Deal-ers Association and must also include the statement: “Data Source: Polk.”

State Market Share for Top 15 Selling Brands YTD ‘14 thru August* vs. YTD ‘13

Top ten ranked brands in each percent change category are shaded green.

*Figures for August 2014 were estimated by Auto Outlook.

Source: Polk

*Figures for August 2014 were estimated by Auto Outlook.

Source: Polk.

October 2014 / Page 7

visit us online at www.mada.org

Endorsed Service & Vendors

MADA Services sells a wide variety of products directly to the dealers including business forms, clothing and promotional items. For a full review of options, contact your sales representative at 651-291-2400 or go to www.mada.org

Computerized Vehicle Registration CVR

F&I Products Protective

Dealership Marketing Visible Customer

Group Health Insurance Blue Cross Blue Shield of MN Delta Dental ReliaStar Life

Workers Compensation Ensure Agency

Dealer Bond Program Ensure Agency

Collections Springer Collections

Check Guarantee/Credit Card Processing FIS / Certegy

Disability Income Insurance & Section 125 Cafeteria Plans American Fidelity Assurance

OSHA, EPA & DOT Compliance/Training ComplyNet Corporation

Fleet Fueling Program SuperAmerica

Office Supplies S&TOfficeProducts

Uniforms and Linen Services AmeriPride Linen & Apparel Services

Hole-In-One Insurance Hole-In-One-USA

Pre-Paid Legal, Jim Gavin Identity Theft Shield & Pre-Paid Legal Services

FAQ

Q: We tried out the new simplified shop lien foreclosure procedure and ran into a snag. We sent out the notices by certified mail that MADA suggested in its material on the web site. However when we tried to apply for title in the dealership’s name, the application was rejected. What’s wrong?

A: Applying for title in the dealership name is the problem. In order to take advantage of the new simplified foreclosure provision, the dealership must sell the vehicle to a retail or wholesale customer and apply for title in their name.

Legal News

Political Campaign Material In Dealerships Illegal Be careful if you plan to allow political campaign material in your dealership or on dealership property this fall. You could be in violation of Minnesota’s campaign finance laws. Minnesota law specifically prohibits the use of corporate money, property, service, or “thing of monetary value” to promote or defeat the candidacy of an individual for election to political office. Displaying your favorite candidate’s literature or lawn sign in your dealership will be considered an illegal corporate contribution for which you and your company can incur serious penalties.But, if you really love your candidates and you just

can’t say no to those colorful signs, you can get around the campaign finance law violation by (1) charging a fee for the rental of the space AND (2) making the same opportunity to rent the space available to all candidates running for that seat. It is not a violation of the law to post messages that promote voting as long as the messages are not controlled by any particular candidate or political party. It is also OK for candidates to meet with you and your employees at your place of business to discuss the issues. Finally, don’t hesitate to call MADA’s Amber Backhaus if you have any questions about political activity.

Scott Lambert, Executive Vice President • 200 Lothenbach Ave. • West St. Paul, MN 55118 • (651) 291-2400 • 1-800-652-9029 • FAX (651) 291-2894

200 Lothenbach AvenueWest St. Paul, MN 55118

ADVOCACY • EXPERTISE • EDUCATION • COMMUNICATIONMADA NEWS • OCTOBER 2014

“Obama sounded like Al Gore on global warming. The more the case for man-made warming falls apart, the more hysterical Gore gets about an imminent catastrophe. The more public support his stimulus bill loses,

the more Obama embraces fear-mongering.”--Fred Barnes

MADA Annual Meeting Keynote Speaker Fred Barnes on Friday, Dec. 5th. Mark your calendar now!

EducationFax Registration

For Information on these classes or to register online go to www.mada.org/training

FAX REGISTRATION TO: 651-291-2894Denise Anderson denise@mada.org

The Certified Title & Registration Program

Class Options Circle Preferred Date LocationSales Tax9:00 a.m. - 10:00 a.m. $99 November 12, 2014

Doubletree by Hilton - Park Place1500 Park Place BlvdMinneapolis, MN 55416

New to Fleet 10:30 a.m. - 12:30 p.m. $99 November 12, 2014

Minnesota Titles and Transfers1:00 p.m. – 3:00 p.m. $99 November 12, 2014

Name__________________________________________ Title____________________________

Name__________________________________________ Title____________________________

Dealership______________________________________ Customer ID #____________________

Address________________________________________________________________________

Phone______________________________ E-mail______________________________________

OSHA and Your Automotive Lifts

Class Options Circle Preferred Date Location

OSHA and Your Automotive Lifts - Webinar10:00 a.m. – 11:00 a.m.Free to Council Members$49 non-members

October 22, 2014 Webinar

Title Basics

Class Options Circle Preferred Date Location

Title Basics – Minneapolis9:30 a.m. - 11:30 a.m. $199 November 12, 2014

Doubletree by Hilton - Park Place1500 Park Place BlvdMinneapolis, MN 55416

faxregistration.indd 1 10/15/14 10:44 AM