Pub. 54 2013-2014 Issue 4

36 T he responsibilities of operating a franchised new vehicle dealership consume the daily lives of Texas dealers. Taking care of their customers, ensuring the safety of the driving public, effectively managing staff, complying with a myriad of local, state and federal regulations, making the payroll, paying taxes, collecting and remitting taxes and fees, satisfying their manufacturer’s requirement for sales processes, facilities and investment, equipping and training their employees, marketing their products effectively, serving the communities in which they live and work --- a pursuit which few could manage and still maintain a viable business. What the dealer never has time to reflect upon is how his or her hard work and dedication has created benefit for so many others. The agencies and institutions that use the dealer and custom- ers’ tax money to educate our youth, pay law enforcement, build needed infrastructure and run our state, the dozens of suppliers and vendors that depend upon franchised dealers for the success of their businesses and their payrolls and purchases. All of these organizations benefit from the existence of principally family owned new car and truck dealers. Local charities, schools, hospitals, youth sports teams, boards and commissions and positions of community leadership all depend upon having a wide array of franchised dealers available throughout the state. One of the contributions that can be quantified is the direct economic impact on the state. 1257 Texas franchised new car and truck dealerships in 284 Texas cities and towns, employing 91,370 Texans provide $11.4 billion per year to Texas and Texans. Not only do the franchised dealers’ payroll, capital investment, taxes and fees stay in Texas but so does almost all of the dealers’ after tax net profit. Texas has the best of all worlds economically with new car and truck dealers. Virtually every dollar taken in by Texas franchised dealers stays at home. Texas benefits from a $5.3 billion annual payroll, a half billion in capital investment, $3.5 billion in taxes paid or collected and remitted. A billion dollars in net dealer- ship profit stays in Texas. No other major industry makes that contribution to Texas. If a corporate entity makes a profit, that money does not stay in our state but goes to stockholders or to a corporate headquarters out of state or even out of the country. That is why 1,257 principally family owned franchised dealers in 284 cities and towns represent the perfect economic engine and are essential to Texas and Texans.  Texas Franchised Dealers Average Year RATIO TO DEALERSHIP NET PROFIT 1. TOTAL DOLLAR SALES $70,832,000,000 2. NET PROFIT AFTER TAX $1,090,812,800 (1.54% of Sales) 3. PAYROLL (91,370 Texans Employed) $5,330,000,000 4. TAXES PAID FIT, PROPERTY, FRANCHISE, SALES, PAYROLL $964,112,209 5. CAPITAL INVESTMENT $498,652,466 6. INSURANCE PREMIUMS PAID $287,172,867 7. ADVERTISING $806,802,500 8. DIRECT CONTRIBUTION $7,886,740,042 7.2 to 1 9. MOTOR VEHICLE SALES $3,146,211,900 TAX COLLECTED & PAID 10. TITLE FEES, REGISTRATION FEES $400,000,000 SALES TAX ON PARTS 11. ECONOMIC CONTRIBUTION $11,432,951,942 10.5 to 1 TADA Economic Impact Study 2001, NADA Economic Information 2013 Franchised New Car and Truck Dealers Texas Perfect Economic Engine