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Dealers could not have sidestepped fee increases imposed by governor

November 23, 2010
The recent compromise measure offered to Illinois Gov. Rod Blagojevich by the CATA and the IADA, which raised a new-car dealer's annual license fee from $100 to $1,000, left many dealers howling that the associations should have deflected any fee increases for dealers. But faced with a $5 billion state budget deficit, the governor's office estimated it could collect $5 million by eliminating the interim use and demonstrator tax exemptions that dealers now enjoy. A paperwork nightmare would have developed under that proposal, which would have assigned a Use Tax to service loaners, sales demonstrators, test drive vehicles, driver's education vehicles, vehicles loaned to charities, parade vehicles and parts trucks. Blagojevich's staff said the tax exemptions would remain if the CATA and the IADA offered an alternate method to raise $5 million from the dealer body. An increase in license fees for new- and used-car dealers-as well as for body shops, rebuilders, motorcycle dealers, parts recyclers, auctioneers and scrap processors-meets the governor's $5 million goal. No fee increase is welcomed. But in this case, it beats the alternative.