AN ACT to amend Tennessee Code Annotated, Title 67, relative to taxes.
Impact
The impact of SB0867 will be significant for the automotive sales industry in Tennessee. By allowing dealers to advance sales tax amounts and later collect them from retail purchasers, the bill provides dealers with better cash flow management opportunities. This change is expected to stimulate the used car market, potentially making it easier for consumers to purchase vehicles with less upfront payment, thus promoting inclusivity in the automotive market.
Summary
SB0867 aims to amend Tennessee Code Annotated, Title 67, specifically concerning sales tax regulations related to dealers who primarily sell used automobiles. The bill introduces a new credit mechanism for these dealers when they assign sales-related security agreements to affiliated finance companies. This provision aims to ease financial burdens on used car dealers by allowing them to recoup some sales tax costs upfront when financing automobile sales.
Sentiment
General sentiment surrounding SB0867 seems to be cautiously optimistic. Supporters within the automotive sector appreciate the bill for its potential to increase sales and improve liquidity for businesses. However, there are concerns from some consumer advocacy groups about the implications of less stringent financial practices. They worry that these provisions could lead to an increased financial burden on consumers if not monitored correctly.
Contention
One notable point of contention involves the conditions under which the new credit is applicable. Critics argue that allowing dealers to assign security agreements to affiliated finance companies could lead to situations where consumers are not fully informed about the financial agreements they enter into. There is a discussion about the potential for predatory lending practices, emphasizing the importance of ensuring transparency and consumer protection within the framework of this legislation.