BY Joseph Turner
joe.turner@thenewstribune.com
Auto dealers, who have seen their sales go into the tank for more than a year, are asking the Legislature to allow them to triple the fee they now can charge customers to process car-purchase paperwork.

The new “documentary service fee” would be $150, up from $50 today. Overall, such an increase could let auto dealers statewide pocket as much as $100 million to $150 million, money that goes straight to their bottom line. Those figures assumes dealers will sell 1 million cars and trucks and that all dealers would charge the maximum fee allowed, as most do.

Sen. Tracey Eide, D-Federal Way, said she sponsored Senate Bill 5816 at the request of the Washington State Auto Dealers Association and its 328 dealerships, and one of her former constituents, Mary Byrne, former owner of Nissan of Fife. Byrne now is a partner in Advantage Nissan in Bremerton.

“They told me that Washington state sales are down by at least 30 percent and that they just want to be able to compete with Idaho and Oregon on our borders, which have lower sales taxes,” Eide said. “They came to me asking for help. Our local dealers are our livelihood in our communities and they are going extinct. If they think this is going to be their lifeline, I’ll be there.”

Bruce Reeves, spokesman for the Senior Citizen Lobby, testified against Eide’s bill and against a similar measure, House Bill 1939, which was sponsored by Rep. Dean Takko, D-Longview.

“The bill has no benefit to the public,” Reeves said. “It’s clearly a windfall for the dealers. And it’s ill-timed. This is no time to tack on $100 to the cost. It will just hurt owners.”

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Eide said the fee is voluntary and her bill would make it clear that it is as much a negotiable item as the price of the vehicle itself. Sales and lease documents would have to disclose in bold-face, italics, underlined type or in capital letters that the $150 fee is negotiable, she said.

The Senate Transportation Committee is scheduled to vote on Eide’s bill today at 1:30 p.m. The House Transportation Committee is scheduled to vote on Takko’s bill on Friday.

Vicki Fabre, executive vice president of the dealers assocation, said there are 22 fewer dealerships today than there were a year ago in Washington because of closures, consolidations or pullbacks by manufacturers.

“These are really touch times,” Fabre said. “And this is one of the tools that will help dealers.”

The higher document fee will help Washington dealers come closer to being as profitable as their counterparts in Idaho and Oregon. Washington dealers already lose sales because buyers are willing to drive 50 miles to get a better deal on prices, she said.

She also disputed the assumption that dealers will sell 1 million vehicles in each of the next two years, which is what the state Department of Revenue predicted. It may be only half that number, she said.

Until 2003, dealers got nothing for processing vehicle registration forms and other documents that are related to the sale of new or used vehicles. But the Legislature that year approved a $35 “doc fee,” which one state lawmaker characterized at the time as “extortion.”

Sen. Mary Margaret Haugen, D-Camano Island, who was then and still is chairwoman of the Senate Transportation Committee, said auto dealers had threatened to oppose the 5-cent increase in the state gas tax the Legislature approved that year if the dealers didn’t get authority to charge their customers the extra fee. Dealers were upset by the 0.3 percent sales tax on vehicles that also was part of what was then a $4 billion tax package for state highway, bridge and ferry projects.

Then-Gov. Gary Locke signed the fee into law in 2003. In 2007, the Legislature boosted the fee to $50 at the urging of Sen. Ed Murray, D-Seattle.

Car and truck sales have dropped steeply.

The state Department of Revenue reported earlier this month that tax collections from motor vehicle dealers were 26.8 percent lower in the Jan. 11-Feb. 10 time frame than they were for corresponding period in 2008. That reflects the drop in car and truck sales.

“The auto sector, the largest retail trade category, has now reported a year-over-year decline in tax payments for 13 consecutive months,” Eric Swenson, the agency’s senior economic forecaster, wrote in his Feb. 10 tax collection report.

Swenson said because of a lag in reporting, the January-February collections actually show the retail activity in December 2008.
I have calls into Takko and the auto dealers assocation. I’ll update this when they call me back. And I’ll let you know what happens in the Senate Transporation Committee later today.

Joseph Turner: 253-597-8436
blogs.thenewstribune.com/politics