Dealership Sales Tax Incentives - How common are they?

[XDCX]

I just read an article where a community in Arizona has agreed to rebate 50% of vehicle sales tax collections back to an Auto Mall developer for a period of 10 years! :eek:

The agreement stipulates that the developer will receive 50% of the sales tax collections until the end of 2017 or until the amount reaches $60 Million - whichever comes first. A $6 Million/year tax incentive is pretty appealing.

In an age where the Internet has driven new car gross profits to record lows, wouldn't this contribute to the demise of neighboring dealers? We all know of customers that drive across town to save $100. This incentive could easily be $200 - $800 per unit - and it lasts for 10 years.

Are these tax incentives common in other states, or is this just a West Coast thing?

I'd love to hear some comments from dealers that surround this area and have to compete with this incentive.

Here's a link to the news report: http://www.eastvalleytribune.com/story/106244

[XDCX]

According to a newspaper report, the City of Norco in Southern California loaned a dealership $600,000 for facility improvements needed to attract a Suzuki Franchise to the location.

Terms of the loan indicated that the loan did not have to be re-paid if the new dealership generated $600,000 in Sales Tax Revenue over a seven year period.

Perhaps these arrangements are more common than I thought?

Here's a link to the news report: http://www.dailybulletin.com/ci_8327113

[XDCX]

Please note that this thread is over a year old, but I continue to be amazed by some of the Dealership Sales Tax Incentives that are issued by local governments.

The latest headline comes from Aurora, Illinois where a Honda Dealer is hoping to make changes to an agreement that provides a 50% rebate of Sales Tax for the dealership.

The news report indicated that the prior agreement netted the dealership over $2.4 Million in the last 10 years.

Here's a link to the news report: http://www.suburbanchicagonews.com/foxvalleysun/business/1399803,2_6_5_FV29_DEALER_S1.article

To be clear, I'm not opposed to these incentives, I just want to make the members of this forum aware of them. Maybe someone here could benefit from a similar agreement with their local government?

[XDCX]

While I know this thread hasn't been updated for seven months, I ran across another Sales Tax Incentive that was authorized by a local government.

In this case the O'Fallon City Council has authorized up to $700,000 in Sales Tax Incentives over the next 10 years in exchange for the dealer investing in his business. The City Council originally agreed to a $500,000 incentive but increased it to $700,000 when the dealer added a Suzuki and Mahindra franchise.

Similar to other arrangements, the City will split the Sales Tax 50/50 until the $700,000 is reached.

Here's a link to the report - click here (http://www.bnd.com/news/local/story/886601.html)

As before, I'm not opposed to these deals but I wonder if it places the other dealers in the City at a competitive disadvantage?