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Southeastern News

1HomePageMap small se 0816Local news stories affecting the auto body industry in Florida, Georgia, Alabama, Mississippi, North Carolina, South Carolina, Virginia, Tennessee, and West Virginia

Controversial parts procurement program erodes profits, cedes control

UPDATE

A statewide collision-repair industry association is taking a stand against insurance giant State Farm’s proposed parts procurement program, Parts Trader. The Florida Autobody Collision Alliance opposes Parts Trader and is a launching a state-wide initiative to inform its members and the collision-repair industry about the program. Having held the first one on Tuesday October 9th the response has been overwhelming. With over 100 in attendance at the first meeting they are looking forward to just as strong of a turnout throughout the state.

State Farm claims that its Parts Trader auto-part ordering system can improve parts availability, process efficiency and order accuracy while creating a better experience for customers. But the program has been met with overwhelming resistance from shop operators and suppliers around the country.

FACA has visited three of the four cities that served as pilot markets for the parts procurement program, gathering opinions and data on how the program affects collision-repair shops and their customers. FACA maintains that the program cuts into profits, slows operations and relinquishes to insurers one of the last segments of the collision-repair business that repairers can still control.

In an effort to raise awareness and inform its membership about the Parts Trader program, FACA is hosting a series of Town Hall meetings with the Florida Automobile Dealers Association in cities around the state. The preliminary schedule appears below.

Jacksonville

Tuesday, Oct 9, 6:00 p.m.
Ramada Inn, 3130 Hartley Rd

Tallahassee
Wednesday, Oct 10, 6:00 p.m.
University Club

Tampa Area
Tuesday, Oct 16
Location TBD

Orlando
Wednesday, Oct 17
Location TBD

Pensacola
Thursday, Oct 18
Location TBD

Space/Treasure Coast
Monday, Oct 22
Location TBD

Ft. Lauderdale
Tues, Oct 23
Hilton Deerfield Beach

Miami
Wednesday, Oct 24
Location TBD

Ft. Myers
Thursday, Oct 25
Location TBD

About the Florida Autobody Collision Alliance

The Florida Autobody Collision Alliance is committed to the future of the collision repair industry: to provide the leadership needed, raise the professional image of the industry and develop new leaders to carry forward. FACA’s goal is to educate, inform and represent the collision repair professional in all aspects of the industry, including repairers, insurers and vendors. www.facafl.com.

 

The Florida Autobody Collision Alliance (FACA) launches a statewide tour this month to conduct town hall meetings to share facts about State Farm's PartsTrader pilot parts procurement program.

Members of FACA recently completed visits to pilot cities to speak with several shops and vendors on a fact-gathering mission.

FACA Executive Director Cathy Mills and former State Farm estimatics team manager Steve Plier will be conducting the town hall meetings statewide over the next three weeks. FACA is seeking assistance with meeting locations.

The Georgia Collision Industry Association (GCIA) announced that Allstate has reversed its decision that it would no longer reimburse shops for the sales tax charged to consumers on paint and materials. According to GCIA, Allstate communicated this change in policy to individual GCIA members. GCIA then contacted the Georgia Department of Revenue, which cited Regulation 560-12-2-.08:

In general, regulation [560-12-2-.08] provides that the sale of auto painting can be structured as either:

1) the sale of painting services, where the auto painter must pay tax on all tangible personal property used to perform his service and will bill his customer for painting services only; or

2) the retail sale of paint with painting labor, where the auto body shop will purchase the paint exempt for resale, and then bill his customer for the paint and repair/painting labor, and then collect tax on the sale to the customer.

Of course, the labor charge will be exempt if itemized on the customer's invoice. Regulation 560-12-2-.08 supports both types of transactions. The Department can only require that the tax be applied correctly to the type of transaction chosen by the seller and buyer. 

On Tuesday, September 25, 2012, Dan Risley, market manager (south) for Allstate, spoke to Howard Batchelor, executive director of GCIA, and told him that Allstate will pay sales tax on paint and materials.

GCIA is attempting to obtain an official written statement from Allstate. In addition, GCIA is working on guidelines for members as to how shops should pay, collect and remit the sales tax on paint and material items. Anyone wishing to assist in writing these guidelines should contact Howard Batchelor at (770) 367-9816 or howard@gcia.org.

Thursday, 20 September 2012 16:31

Florida Body Shop Owner Arrested in Tax Case

Gary P. Chung, the owner of Gary Chung’s Auto Works in Dunnellon, FL, was arrested on charges that he withheld more than $2,000 in sales tax he collected from customers, but failed to send in to the state, according to the Florida Department of Revenue.

Chung, 57, of Dunnellon, was arrested by the Marion County Sheriff’s Office on Aug. 22 on felony and misdemeanor charges relating to theft of state funds, and refusal to file and pay taxes due. If convicted, he faces up to five years in prison and up to $5,000 in fines, as well as possible repayment of stolen tax, interest, penalty and investigative costs.

According to Revenue Department investigators, Chung collected tax from customers at his shop. However, during various periods beginning in 2010 and lasting through periods in 2012, he failed to send in to the state all of the sales taxes that he had collected or file tax returns as required by law. Under state law, sales tax is the property of the state at the moment of collection.

The Mississippi Collision Repair Association met Aug. 20 to discuss how shops can collect the balance on short paid claims. Attorney Melvin Pace explained how by having vehicle owners sign Power of Attorneys to give shops the right to make repair decisions and collect all money owed for repairs.

The newly revived association has plans to expand in north and south Mississippi. The next meeting will be held in Gulfport, MS, on Sept. 20 and the October meeting will be held in north Mississippi.

Thursday, 20 September 2012 16:21

Gunder’s Has 15 Insurers Paying New Labor Rate

“15 and Counting,” answers Ray Gunder. “That’s how many insurers, since this past August, have seen fit to pay our revised labor rates rather than to try and legally defeat what we deem to be ‘reasonable and necessary!’”

Gunder goes on to state: “It’s been a busy few weeks, and while 14 of the 15 insurers conceded without so much as a whimper, Infinity Insurance needed a bit of persuasion. With the help of our legal counsel, Attorney Brent Geohagan’s representation of Gunder’s Auto Center, Inc., they too came to the right conclusion and are paying our new labor rates for body and refinishing, as well as an elevated labor rate for frame/unibody repair. Of course they are also paying applicable legal fees and costs for the lawsuit as well.”

 

Event: I-CAR Atlanta 4th Annual Rockin’ Car Show
Start:
October 6, 2012 10:00 am
End:
October 6, 2012 3:00 pm
Cost:
$25
Organizer:
I-CAR Atlanta Committee
Phone:
404-886-3487
Updated:
August 29, 2012
Venue:
Hooters
Phone:
678-464-5835
Address:
2102 Old Hwy 41, Kennesaw, GA, 30144, United States

Make plans to attend the I-CAR Atlanta 4th Annual Rockin’ Car Show on Saturday October 6th, 2012. Show hours 10 am until 3 pm with Judging from 12 noon until 1:30 pm. Rain date is Oct 27th.  27 different classes and 3 Best of Show Trophies.  Live music by The Fender Benderz!  Held at Hooters located at 2102 Old Hwy 41 in Kennesaw, GA.  Download the info flier – click here.