Pub. 55 2014-2015 Issue 3

21 SPRING 2015  FRANCHISED DEALER — CONTINUED ON PAGE 22 Community Impacts 1. Family Owned & Operated Businesses 2. Charitable Giving 3. Volunteer Hours 4. Community Involvement 5. Cost Savings 6. Safety 7. Used-Car Market 8. Transportation Impact • 85% of dealers are family owned and operated. Profits from these dealers are invested locally, and not transferred out of the region to corporate headquarters. • The average annual capital investment of dealers is nearly $400,000. The average capital investment over the life of a dealership is nearly $7 million. • The average dealer contributes $40,100 on an annual basis to charitable organizations. In total, nearly $50 million are donated from dealers across the state on an average annual basis. • Dealers and their employees volunteer more than 135,000 hours to non-profits and charitable organizations each year. • More than 70% of Texas dealerships have employees who are actively engaged in local schools, churches, and little leagues. • The most common board memberships for dealer em- ployees include churches, Rotary Clubs, Lions Clubs, and downtown associations. • Auto dealers operate without the benefit of business incen- tives, which are ultimately funded by taxpayers. • The auto industry is one of the most competitive industries in the country – the Franchise Laws make sure of that. Profit margins for dealers have fallen from 8.19% in 1988 to 3.78% in 2013. • The average price of a new vehicle has risen by 135.4% in the past 25 years. However, only 0.24% of increased vehicle costs have come from dealers. The other 99.76% came from auto manufacturers. • There is a franchised dealer within minutes of every household in Texas, leading to increased safety for Texas drivers. Dealers perform routine maintenance and service repairs, as well as safety recalls, even if the manufacturer is no longer in business. • Texas dealers are able to handle the used-car market in a way that is fast, efficient, and able to complete the process in one transaction – all under one roof. Dealers are also able to assess the appropriate taxes and fees, while applying the proper tax benefits. • Online sales make for less efficient transportation logistics. More distribution by semi-trucks would be needed, rather than by rail, leading to increased monetary costs, as well as pollution, congestion, and related road safety concerns. Auto dealers in Texas provide significant value to the state. In 2013, the average dealer in Texas employed 73 people. With 1,257 dealerships throughout the state, that comes to 91,385 jobs. These are good jobs that pay middle-class incomes. Total payroll for Texas dealerships in 2013 was $5.33 billion, making the average earnings equal to $58,325. Aside from jobs created and incomes paid, Texas auto deal- ers contribute a great deal to the greater communities in which they serve. Throughout the state, more than $3.5 billion in taxes were collected, including property taxes, sales taxes, and title and registration fees. But, perhaps, the largest impact of all comes in the form of philanthropy. These impacts are measured, not in terms of dollars generated or output gained, but in terms of unique contributions to the community that originate with Texas auto dealers. On an annual basis, more than 135,000 hours are volunteered and 1,400, e state. ail sales n. onomic vehicle ion 5-Year Tax Impacts State & Local Federal Direct $36,356,803,017 $13,905,128,083 Indirect $2,965,132,904 $5,603,200,441 Induced $3,927,848,220 $5,668,189,118 Total $43,249,784,141 $25,176,517,642 * Retail impacts include benefits to all retail sectors outside of the automobile industry. 10 Most Highly Impacted Business Sectors 1. Motor Vehicle Retail 2. Real Estate Establishments 3. Financial Institutions 4. Wholesale Trade 5. Advertising 6. Food Services & Drinking Places 7. Insurance Agencies 8. Warehousing & Storage 9. Maintenance & Repair of Structures 10. Employment Services 1,400, e state. il sales n. nomic vehicle on Retail Spending $6,227,262,768 5-Year Tax Impacts State & Local Federal Direct $36,356,803,017 $13,905,128,083 Indirect $2,965,132,904 $5,603,200,441 Induced $3,927,848,220 $5,668,189,118 Total $43,249,784,141 $25,176,517,642 * Retail impacts include benefits to all retail sectors outside of the automobile industry. 10 ost Highly Impacted Business Sectors 1. Motor Vehicle Retail 2. Real Estate Establishments 3. Financial Institutions 4. Wholesale Trade 5. Advertising 6. Food Services & Drinking Places 7. Insurance Agencies 8. arehousing & Storage 9. Maintenance & Repair of Structures 10. Employment Services Community Impacts 1. Family Owned & Operated Businesses 2. Charitable Giving 3. Volunteer Hours 4. Community Involvement 5. Cost Savings 6. Safety 7. Used-Car Market 8. Transportation Impact  85% of dealers are family owned and operated. Profits from these dealers are invested locally, and not transferred out of the region to corporate headquarters.  The average annua capital investment of dealers is nearly $400,000.The average capital investment over the life of a dealership is nearly $7 million.  Th average dealer contributes $40,100 on an annual basis to charitable organizations. In total, nearly $50 million are donated from dealers across the state on an average annual basis.  Dealers and their employees volunteer more than 135,000 hours to non-profits and charitable organizations each year.  More than 70% of Texas dealerships have employees who are actively engaged in local schools, churches, and little leagues.  The most common board memberships for dealer employees include churches, Rotary Clubs, Lions Clubs, and downtown associations.  Auto dealers operate without the benefit of business incentives, which are ultimately funded by taxpayers.  The auto industry is one of the most competitive industries in the county – the Franchise Laws make sure of that. Profit margins for dealers have fallen from 8.19% in 1988 to 3.78% in 2013.  The average price of a new vehicle has risen by 135.4% in the past 25 years. However, only 0.24% of increased vehicle costs have come from dealers. The other 99.76% came from auto manufacturers.  There is a franchised dealer within minutes of every household inTexas, leading to increased safety for Texas drivers. Dealers perform routine maintenance and service repairs, as well as safety recalls, even if the manufacturer is no longer in business.  Texas dealers are able to handle the used-car market in a way that is fast, efficient, and able to complete the process in one transaction – all under one roof. Dealers are also able to assess the appropriate taxes and fees, while applying the pr p r tax ben fits.  Onlin sales mak for less efficient transportation logistics. More dist ibution by semi-trucks would be ne ed, rather than by rail, leading to increas monetary costs, as well as pollution, congesti n, and related road safety concerns. Average Annual Community Impacts Volunteer Hours: 135,890 Charitable Giving: $49,533,452 Veterans Hired: 12,280 Direct Payroll: $5.33 Billion