The Newsletter of Northeast Equipment Dealers Association, Inc.
!! ! T R E AL udge
DECEMBER 2016 c Vol. 18, No. 213
District Court Judge Mazzant Blocks U.S. Department of Labor’s (USDOL’s) Overtime Rule From Taking Effect on December 1
al J Feder s New Block ime Overt Rule On November 22, 2016, District Court Judge Mazzant blocked the U.S. Department of Labor’s (USDOL’s) overtime rule from taking effect on December 1. The fate of the overtime rules is now uncertain. Unless an appeals court reverses course in the next several weeks and breathes new life into the rules, it is quite possible that the rules will be further delayed, completely overhauled, or altogether scrapped once President Trump takes office. What are the possible scenarios now? It is possible that Judge Mazzant might be swayed by USDOL arguments in the coming weeks, or that an appeals court could step into reverse Judge Mazzant’s ruling before President Trump takes office. As the judge said in his opinion, it could be that this ruling “only delay[s] the regulation’s implementation.” Assuming that the injunction survives the remainder of President Obama’s term, it is difficult to predict what President Trump will do with the rules once in the White House. Perhaps President Trump will direct his USDOL to commence a new rulemaking process, subject to notice and comment, with the goals of setting lower thresholds for the salary requirement and eliminating the three-year update, among other changes. How long and what form such a process would take, and what could or would be done in the meantime, are currently unpredictable. What should employers do now? Some employers might find themselves in a difficult spot. If you have already made alterations to your compensation plans or to your employees’ exemption status, it might be unpopular to reverse course now. Although you may have the legal right to revert to the status quo depending on your circumstances, you might consider waiting until a final decision is reached in court, Congress, and the White House before doing anything further. If you had been waiting until December 1 to implement the changes, you have the option of putting any alterations on ice and awaiting a final determination on the fate of the rules. If you do so, you might consider communicating to your workforce that the expected changes are going to be delayed given today’s court ruling, and let them know that you will continue to monitor the situation and make adjustments when and if appropriate. For more details, read the full Fisher Phillips LLP:: https://www.fisherphillips.com/resources-alerts-court-preliminarily-haltsovertime-rules-with-last?click_source=sitepilot06!989!YmdhcmxpbmdAYW1nbGxjdXNhLmNvbQ==
IN THIS ISSUE: 3 Observations from the Field 4 Association News 6, 7, 12 Regional Meetings 8 Hoober Announces New Product Specialist 10 NEDA Board Committee Assignments 12 Understanding the UPS and FedEx 13 Association Programs / Information
ADVERTISER’S: 14 What Leadership Needs to Know About Sales 16 Goodwill - Not the Charity 20 One Key to Running a Great Business 22-23 Tax Tips 24-25 Equipment Industry News 26 Caution: Severe Weather Driving Ahead
2 5 11 11 15 17 19 21 27
Haylor, Freyer & Coon
New York Farm Show Electronic Merchant Systems PartnerShip Flat Rate Guide Fastline J.J. Keller & Associates, Inc. LED Light Special Federated Insurance
NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with you and your industry association.
NEDA Workers’ Compensation Safety Group
Over 23.00% Average Dividend For The Last 10 Years! Exclusively for New York Members of the Northeast Equipment Dealers Association
Policy Year 2014-2015 2013-2014 2012-2013 2011-2012 2010-2011 2009-2010 2008-2009 2007-2008 2006-2007 2005-2006
Dividend 20.0% 15.0% 15.0% 5.0% 20.0% 25.0% 37.5% 20.0% 35.0% 37.5%
Members of NEDA Inc. Construction/Industrial Equipment Dealers Material Handling & Lift Truck Dealers Farm Equipment Dealers Outdoor Power Equipment Dealers Rental Equipment Dealers with Repair Facilities Aggressive Advance Discount (up to 20%) Excellent Dividend Potential Claims Management & Loss Control Services Monthly Installments for Qualifying Dealers
Eligible NEDA Dealers Purchasing Workers’Comp From Safety Group #548
Eligible NEDA Dealers Purchasing Workers’ Comp From ALL OTHER SOURCES
To see if you qualify, call Pat Burns at Haylor, Freyer & Coon 315-703-9148 / 800-289-1501 or fax a current declaration page to 315-703-8159 or Call Ralph Gaiss (Executive Director of NEDA) at 315-457-0314 for more information. You may also visit us at www.haylor.com/NEDA
First off, I want to wish everyone a joyous Holiday Season! As I’ve often said, sharing time with friends and family is always special. Hopefully this year it won’t become one of those blessings so easily forgotten in the midst of the “holiday rush”. Please, be sure to set time aside and enjoy the spirit of the season, it only comes once a year and will be over far too quickly! Tim Wentz Personally I couldn’t be happier that the Field Director elections are over! Most everyone seems to 717.576.6794 agree that the election was a “change” election. That being the case, I don’t think anyone can honestly predict exactly what “changes” will take place in 2017 or what their impact will be on the economy (both global and domestic) and in particular the Agribusiness, Landscape and Construction sectors. Regardless of what happens, one constant is undeniable: dealers who have truly invested in the planning, budget and monitoring processes/ programs will continue to be profitable. They understand that in order to truly be successful, they must focus on distinguishing their dealership(s) as a place where customers can find value added to every transaction/interaction and have committed themselves and their staffs to a culture of excellence! Taking a dealership to “the next level” by establishing a culture of excellence does not happen without a continuing focus and commitment to staff education, personal development and professionalism! Experience has repeatedly proven that investments in staff education and development continue to pay dividends well beyond their expected return. Attend one of NEDA’s regional meetings and ensure that your dealership leverages the full value and benefit of your NEDA membership investment!
Sharon Springs Garage / Sharon Springs, NY 518-852-6985 • Fax: 518-284-2774 AGCO, White, Hesston, Gehl, Kubota, Allis, Simplicity email@example.com
John E. KOMARISKY, 1st Vice President / Treasurer Past President 2015, 2012 Main & Pinckney Equipment Inc. / Auburn, NY 315-253-6269 - FAX 315-253-5110 New Holland, Simplicity, Brillion, Bush Hog firstname.lastname@example.org NATE SHATTUCK, 2nd Vice Pres. / Past Pres.- 2010 Devon Lane Farm Supply, Inc. / Belchertown, MA 413-323-6336 • Fax: 413-323-5080 Yanmar, Landini, Monosem, Ferris, Simplicity, Stihl, Husqvarna email@example.com
JOSH AHEARN, Immediate Past President 2016 Ahearn Equipment, Inc. / Spencer, MA 508-885-7085 • Fax: 508-885-7261 Kubota, Cub Cadet, Stihl, NAPA Dealer firstname.lastname@example.org RALPH GAISS, CEO and Executive Vice Pres. 800-932-0607, Ext. 222 • Fax: 315-451-3548 email@example.com
Directors BRIAN CARPENTER, Chairman of the Board for EDA, 2016-2017, St.Louis, MO / NEDA Past President 2009 Champlain Valley Equipment / Middlebury, VT 802-388-4967 • Fax: 802-388-9656 New Holland, Case IH, Kubota, Gehl firstname.lastname@example.org
Mountain View Equipment, Inc. / Plattsburgh, NY 518-561-3682 • Fax: 518-561-3724 John Deere AG/CCE, Claas, Kuhn Knight, Kverneland, Stihl, Husqvarna, Frontier, Servis, Rhino email@example.com
Hoober, Inc. / Mifflintown, PA 717-436-6100 • Fax: 717-463-2312 Case IH, JCB, Kubota firstname.lastname@example.org Hines Equipment / Cresson, PA 814-886-4183 • Fax: 814-886-8872 Case IH, Gehl, New Idea, Cub Cadet email@example.com
Best Western Premier Eden Resort & Suites 222 Eden Road | Lancaster PA 17601
Craig Houseknecht, EDA & UEDA/NEDA OPE
Wednesday February 8, 2017 ... LIVERPOOL, NY
Moffett Turf Equipment (MTE) / West Henrietta, NY 585-334-0100 • Fax: 585-334-6332 firstname.lastname@example.org
Holiday Inn 441 Electronics Parkway | Liverpool, NY 13088
Jacobsen, Mahindra, Ventrac, Smithco, Turfco, Redexim, Golf Lift, Lely, Ryan, RedMax
Friday February 10, 2017 ... CONCORD, NH
SCOT L. STANTON, Past President - 2003 Stanton Equipment Inc. / East Windsor, CT 860-623-8296 • Fax: 860-627-9832 John Deere Ag., Knight, Athens, Hardi email@example.com
Grappone Conference Center 70 Constitution Avenue | Concord, NH 03301
For a preview of the meeting agenda and speakers, go to: https://www. ne-equip.org/wp-content/uploads/2016/10/doc20161011090837.pdf
The general information provided in this publication is not intended to be nor should it be treated as tax, legal, investment, accounting, or other professional advice. Before making any decision or taking any action, you should consult a qualified professional advisor who has been provided with all pertinent facts relevant to your situation. This publication is designed to provide accurate and authoritative information in regard to the subject matter co vered. It is furnished with the understanding that the Northeast Equipment Dealers Association, Inc., the publisher, is not engaged in rendering legal, accounting or other professional service. Changes in the law duly render the information in this publication invalid. Legal or other expert advice should be obtained from a competent professional. Some of the editorial material is copyrighted and may be reproduced only when permission is obtained from the publisher and the association.
Officers ROBERT SPOHN, President / Past President - 2005
ED HINES, Past President 2014, 2001
Monday February 6, 2017 ... LANCASTER, PA
Please take advantage of this valuable Member benefit! Participation pays!
Board of Directors
WENDELL WALLDROFF, Past President - 2002 Walldroff Farm Equip., Inc. / Watertown, NY 315-788-1115 • Fax: 315-782-4852 New Holland, Hesston, Woods, White-New Idea, AGCO, Allis firstname.lastname@example.org David Warner
Warner Tractor & Equipment Inc., Troy, PA 570-297-2141 • Fax: 570-297-2074 Case, Case/IH, Takeuchi, LinkBelt, LandPride, Agr. & Construction email@example.com
Northeast Dealer | DECEMBER 2016 … 3
Your New Ope Dealer Council Member for Neda
Craig Houseknecht, of MOFFETT TURF EQUIPMENT (MTE), West Henrietta, NY, 585-334-0100, is your new OPE Dealer Council Member for NEDA. Craig replaces Josh Ahearn, (his 2 term limit expired) on the “Equipment Dealer Association (EDA) “Outdoor Power Equipment Council” and on the “UEDA/NEDA Outdoor Power Equipment Council”. Purchased in 2010, MTE employs approximately 54 people. Craig’s father, Tom is the owner of the business. Craig is currently the Operations Manager. His uncle and brother are also active in the business. The dealership carries Jacobson, Ventrac, Smithco, Turfco, Redexim, Mahindra, Ryan and RedMax lines. Prior to purchasing the dealership, the Houseknecht family owned and operated a local Pepsi Bottling company for over 100 years. He enjoys traveling, boating, skiing and fishing. Craig’s goal as a council member is to represent and protect OPE dealers in an increasingly hostile environment.
Dealer/Manufacturer Agreements Did you know that the Northeast Equipment Dealers Association (NEDA) and Equipment Dealers Association (EDA) performs legal reviews for many dealer agreements that are released by manufacturers? When a new dealer agreement is announced, we attempt to engage the manufacturer in a discussion about the terms. After those discussions and a review of the agreement by legal counsel, a memo will be created for the affected dealer members to summarize the key changes, describe the legal rights of the members to continue with their current agreement (If your individual State Dealer Protection Law allows it) and often will provide dealers with other important information that will help them make a decision on whether or not they will sign the new contract.
Do You Have A Story To Tell?
Share Your Dealership News With Us NEDA is interested in stories about members getting involved in their communities, supporting charities or otherwise doing good deeds. Have you celebrated a business or personal anniversary, facility expansion, or a prestigious award from one of your suppliers, a special community event you participated in or any other way your business has been recognized that you would like to share with other members and have published in our monthly newsletter? Member stories, along with photos, will be showcased on NEDA’s media sites and in NEDA’s monthly newsletter or Weekly E-bytes. If so, please contact Dave Close or Art Smith, Editor of the monthly newsletter: Dave at 800932-0607 – firstname.lastname@example.org or Art Smith at email@example.com.
4 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
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Indoors and Outstanding
New York State Fairgrounds Syracuse, NY February 23, 24, 25 Thursday, Friday & Saturday 8:30am To 4pm Daily
• The Spring Planning Show of the Northeast • Over 400 Exhibitors • Latest In Farming Technologies • Robotic Milker • Forestry Workshops • Daily Beef Seminars • Together ... Let’s Build The Northeast Agricultural Future Robert Watson Memorial Toy Auction LeClar Bros. Auction Service Friday, February 24, 2017 5:00pm • Building 2, Arts & Home Center For More Information Contact Scott Grigor - 315.457.8205 www.newyorkfarmshow.com / firstname.lastname@example.org
Tickets Available From Your Local Northeast Equipment Dealer Co-sponsored by American Agriculturist Magazine and The Northeast Equipment Dealers Association
Northeast Equipment Dealers Association and Federated Insurance are presenting a seminar you won’t want to miss.
- Risk Management Culture - Industry Loss Analysis - Hiring, Screen, and Retaining Employees - Employment Practices and 3rd Party Harassment - Distracted Driving – What is Important to You? - Claims Management - Cyber Risk Management
- Owners - HR Managers - Designated Managers State SaleS Tax Risk and Across State Line Use Tax Issues Learn about state specific (and dealership industry specific) sales and use tax issues. Transactions with customers from other states are a huge issue and one for which many dealers are ill-prepared to deal correctly. Presenter Rex Collins – HBK CPA & Consultants 6 …”Committed to Building the
Monday, February 6, 2017 Wednesday, February 8, 2017 Friday, February 10, 2017 More specific details to follow
Best Business Environment for the Northeast Equipment Dealer”
Northeast Equipment Dealers Association Regional Meetings
Your website is just as important as your physical location. Are you sure you're giving customers the right impression? When and Where? February 6, 2017: Lancaster, Pennsylvania February 8, 2017: Liverpool, New York February 10, 2017: Concord, New Hampshire
Why Attend? Learn from an Industry Leader Get to visit with a leading expert from Google Increase your dealerships overall ROI Innovate your digital media tactics for the benefit of your dealership Learn and solve the challenges your dealership is facing in 2017 Walk away with a list of website goals for your dealership
See or f page 1r2e mo on. i o inf rmat
Your Website – Your Most Valuable Implement In order to thrive in today’s market, you must have an online storefront that is as organized and pleasant as your physical location. Your website is an extension of your physical locations, so it should include the core values and priorities of each of your locations. It is important that your dealership matches your look and feel throughout every medium. Information-only websites aren’t useful to potential customers anymore. Consumers will look at 7.2 websites prior to purchasing new or used equipment. You are trained to convert customers who come onto your lot, but are you converting lookers into customers in your online store?
TIM WHITLEY CEO, Team SI
About Tim Whitley CEO and Founder of Team SI Google All-Star Partner since 2012 Business Executive of the Year Inc. 500 and 5000 Member Degreed Meteorologist 10+ years in Television Arkansas Business 40 under 40
Renowned digital innovator and CEO Tim Whitley from Team SI and a category expert from Google will provide an overview of digital marketing tools, platforms and techniques that can take sales to a new level and provide constant contact and insights for your most valuable customers.
“Tim Whitley had the room full and engaged as he educated our Agricultural, Construction and Outdoor Power Equipment dealers on the latest digital media tactics to drive additional business to our dealer members. He was without question the most popular speaker during our annual meeting.” – Mike Caraway, Executive Vice President, Midwest-SouthEastern Equipment Dealers Association
Northeast Dealer | DECEMBER 2016 … 7
Hoober Inc. Announces New JCB Product Specialist, Changes in Precision Ag Management INTERCOURSE, PA — Hoober Inc., an agricultural equipment dealer with 9 locations in Pennsylvania, Delaware, Maryland and Virginia recently announced that Ken Diller has been named JCB product specialist following 11 years as precision ag manager for the dealership. As part of this transition, Marc Yoder assumes the role as overall precision ag manager with responsibility of administering Hoober’s RTK network. Dave Wharry will continue in his role as precision ag regional manager and will also focus on technical support and new product testing and troubleshooting within the dealership’s precision ag department. Hoober Inc. was named the 2016 Precision Farming Dealer Most Valuable Dealership by Farm Equipment's sister publication, Precision Farming Dealer magazine. In his new role, Diller will be involved with product demonstrations, field days and equipment shows, as well as assisting in inventory levels, maintenance programs and areas related to JCB products such as sales, service and parts. “We’re excited Ken agreed to help lead our JCB efforts because Ken brings such a wealth of knowledge and experience with him,” said Chuck Hoober, a partner in the family-owned dealership. “There’s been tremendous growth with JCB among our customers in the last couple of years and having Ken lead that product line will enable us to continue to improve our level of service. He did an outstanding job leading our precision ag department and the respect he has earned is something that will carry over to his position as JCB product specialist.” The JCB product lineup is available at all 9 Hoober locations and includes telescopic handlers, Fastrac tractors, skid steers, wheel loaders, as well as implements and attachments. October 19, 2016 | Posted in Dealer News—Farm Equipment Used with permission of Lessiter Media (LM)
Advertising Space is Available! The Northeast Dealer, the Northeast Equipment Dealers Association monthly Newsletter is designed primarily as a source of information for its dealer members and others involved in the industry. Distribution is to more than 850 members and contacts. For additional rate information, publication profile, format specifications, advertising deadlines or any additional questions contact Dave at the Association office at (800) 932-0607 or Art Smith, Editor at ajssja@ embarqmail.com.
8 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
The Board of Directors, Officers and Staff of the Northeast Equipment Dealers Association wish all our members and their families a Merry Christmas and best wishes for a prosperous New Year. Northeast Dealer | DECEMBER 2016 â€¦ 9
NEDA BOARD COMMITTEES 2017
EXECUTIVE/OFFICERS Robert Spohn*** President John Komarisky*** 1st VP/Treasurer Nate Shattuck*** 2nd VP Josh Ahearn*** Immediate Past Pres Ralph Gaiss*** CEO
NOMINATING: Josh Ahearn Chairman
FINANCING: John Komarisky Chairman
LEGISLATIVE: Tim Wentz Chairman & NEDA Field Director State of PA Lobbyist
INDUSTRY RELATIONS: AGCO Wendell Walldroff Chairman Case IH Ed Hines Chairman John Deere Scot Stanton Chairman Kubota Josh Ahearn Chairman New Holland Brian Carpenter Chairman OPE Craig Houseknecht Chairman Mahindra Craig Houseknecht Chairman
Ed Hines Chairman Dave Close** Coordinator Ralph Gaiss** Tim Wentz**
**Association Management Personnel
NEW YORK FARM SHOW BOARD of DIRECTORS:
Northeast Equipment Dealers Association 128 Metropolitan Park Drive 800-932-0607 www.ne-equip.com st NK 1 ASSOCIATION
Northeast Equipment Dealers Association
Matt Jungman (FPC)**** Wendell Walldroff Don Tourte (FPC) Bob LeFrancois
****Matt Jungmann, National Show Mgr. Farm Progress Companies is Director and President of New York Farm Show Board of Directors.
President Vice- President Secretary/Treasurer Member at Large
NEDA NY WORKERS' COMPENSATION SAFETY GROUP 548: Bob Spohn Chairman Patrick Burns Group Manager Tracy Buck Director Steve Carpenter Director Ralph Gaiss Director TBA Director TBA Director
EQUIPMENT DEALERS ASSOCIATION, INC. (EDA) EDA National Director Brian Carpenter Chairman of Board EDA OPE Council Member Craig Houseknecht Council Member All elected officials serve a three year term.
10 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
SNOWBALL YOUR SAVINGS As a NEDA Member Benefit with Electronic Merchant Systems, save your business money on credit card processing You gain access to special rates and discounts as well as 24/7 access What’s more, we are offering a FREE EMV ready terminal to our members. Call today for more information!
Just a few other offered services:
NAEDA is pleased to offer the FREE NAEDA Shipping Program, managed by PartnerShip®. This free member beneﬁt provides signiﬁcant savings on every truckload shipment with our large pool of reputable national, regional, and specialized freight carriers. • • • • •
Fast, free rate quotes Safe, reliable carriers Dry van, ﬂatbed, refrigerated Friendly, dedicated support Maximum cargo liability coverage
Get a FREE QUOTE today at
29077 Clemens Rd. • Cleveland, OH 44145 • 800-599-2902 • sales@PartnerShip.com Northeast Dealer | DECEMBER 2016 … 11
Understanding the UPS and FedEx Rate Increases Every year small package carriers FedEx and UPS evaluate their shipping rates and make adjustments that can have a substantial effect on you and your business. The UPS rate increases take effect on December 26, 2016, while the new FedEx rates take effect on January 2, 2017. As always, how much more expensive your particular small package shipments will be in the new year largely depends on many factors, including shipment volumes, sizes, weights, and modes.
MARKETING YOUR DEALERSHIP Learn all about marketing your dealership through your website. Team SI, a Google Partner, will be on the dealer program at our regional meetings in February. See the dates, mark your calendar and register with NEDA website. See complete articles, locations and dates on pages 6-7. Register now.
Here are some quick facts: • FedEx Express and International rates are increasing an average of 3.9% • UPS Air and International rates are increasing an average of 4.9% • FedEx Ground and Home Delivery® rates are increasing an average of 4.9% • UPS Ground rates are increasing an average of 4.9% • The dimensional divisor for FedEx is changing from 166 to 139 • FedEx SmartPost®, FedEx One Rate®, and UPS SurePost® rates will be changing The important takeaway when thinking about your shipping expenses in 2017 is that the announced average increases paint an inaccurate picture of the true impact these new rates could have on your business. The shipping experts at PartnerShip® have dug into the details and analyzed the new rate tables to assess the true impact to shippers and help you make sense of these changes. Learn more about how the 2017 rate increases will affect your shipping costs by downloading the free white paper at PartnerShip.com/RateIncrease. This tip is brought to you by PartnerShip, the company that manages the EDA Shipping Program. To enroll and receive exclusive discounts on select FedEx® services, visit PartnerShip.com/EDA. For more information, email sales@PartnerShip.com or call 800-599-2902. This program is endorsed by NEDA.
MAKING FORMS & SUPPLIES AVAILABLE & AFFORDABLE We’re here for your form and Supply needs,
PLEASE CALL TODAY!
128 Metropolitan Park Drive, Liverpool, NY Phone: 800-932-0607 | Fax: 315-451-3548 12 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
For Service / SPoNSoreD ProGrAMS, cAll Your ASSociAtioN 800-932-0607 • 315-457-0314 • Fax: 315-451-3548 • www.ne-equip.com Ralph Gaiss, Executive VP/CEO 800-932-0607 x 222 email@example.com Dave Close, Operations Manager 800-932-0607 x 235 firstname.lastname@example.org Kelli Neider, Administrative Assistant 800-932-0607 x 200 email@example.com (Business Forms) Tim Wentz, Field Services Director C: 717-576-6794, P: 717-258-1450 F: 717-609-0793 firstname.lastname@example.org Scott Grigor, NY Farm Show Manager 800-932-0607, Ext. 223 email@example.com Art Smith, Consultant/Editor, NE Dealer 717-258-8476, F: 717-258-8479 firstname.lastname@example.org CHARTER SOFTWARE BUSINESS SYSTEMS Melissa Amen 303-932-6875 - Ext. 219 www.chartersoftware.com CERTIFIED BUSINESS VALUATIONS Western Financial Consulting, P.C. Curtis A. Kleoppel / Bob Charbonneau 816-561-5323 x 116 & 117 Fax: 816-561-1249 or 800-762-5616
LEGAL ASSISTANCE – FREE LIMITED Dave Shay at 816-421-4460 Fax: 816-474-3447 • email@example.com
CREDIT CARD PROGRAM EMS (ELECTRONIC MERCHANT SYSTEMS) Steven Miller 866-367-1818, Direct 585-285-9954 F: 888-782-0173 firstname.lastname@example.org
NEDA On-Line Campus Dave Close at 800-932-0607 x 235 email@example.com
FEDERATED INSURANCE COMPANY Property & Casualty Insurance (8 states except VT), Health Insurance (PA only) Workers' Comp (All states except NY) Jerry Harness at 800-241-4925, C: 412-720-4697 Fax 507-455-7840 firstname.lastname@example.org • www.federatedinsurance.com HAYLOR, FREYER & COON, INC. Health Insurance Program Dan Elliott Mgr., Group Benefit Consulting 315-703-9149 / 800-289-1501, ext. 2149 email@example.com • www.haylor.com Jim McGarvey Supervisor Benefit Consulting 315-703-3239 • firstname.lastname@example.org
OSHA WORKPLACE SAFETY COMPLIANCE PROG. Dave Close at 1-800-932-0607 Ext. 235 email@example.com PARTNERSHIP Freight Program Yellow Freight, UPS Freight, FedEx Ground Keith Korhely at 800-599-2902 x 2254 kkorhely@Partnership.com DEKRA INSIGHT CERTIFIED SPCC PLAN Dave Close at 800-932-0607 x 235 Robb Roesch at 800-888-9596 x 222 firstname.lastname@example.org
Physical Damage Insurance (HF&C, Inc.), Rental / Leasing Equipment Patrick Burns at 800-289-1501, Ext. 2148 Pburns@haylor.com • www.haylor.com Workers' Comp (Return Dividend Program for NY Dealers only) Property & Casualty Insurance for VT Patrick Burns at 800-289-1501, Ext. 2148 Pburns@haylor.com • www.haylor.com
TCF Equipment Finance, a division of TCF National Bank Stacey Simmer, Sales Associate P. 866.424.3150 email@example.com
NEDA BOARD PRESENTATIONS Past President John Komarisky presents Preside Recognition plaque to Josh Ahearn and also a present for his wife Laurel for his term as 2016 President.
President Josh Ahearn presents to the incoming 2017 President Robert Spohn, his Gavel and Mallet. Northeast Dealer | DECEMBER 2016 … 13
by JOHN CHAPIN
What Leadership Needs to Know about Sales In the leadership role, you probably already get that sales is the primary key to massive success and prosperity. As you know, the most successful companies sell better and more than everyone else. Starbucks doesn’t have the best coffee; they’ve simply sold an enormous number of people on doing business with them. That said, to ensure colossal success for your company, here are the sales facts you want to ensure your company is living by.
Fact #1: Sales has to be at the top of the food chain. Everything starts and stops with sales. Without sales, there is no service department, no installation department, and in fact, no people because you’re out of business. Until a product is sold, nothing moves. No money goes into the bank account, trucks don’t move, customers aren’t helped, nothing gets installed or serviced, and economies stop. Companies go out of business because they don’t sell enough at high enough prices. Companies thrive because they sell enough at the right prices to cover bills, payroll, growth, and mistakes. If you want to thrive in good times and bad times, independent of the economy, the President, rules, regulations, and other factors, you do so with lots of sales. Everyone and everything has to support sales first and foremost. Note: This is not permission for the sales department to run roughshod over everyone, treat anyone like a second-class citizen, or break rules in order to sell something. All business must be clean and ethical, and all other departments treated with the utmost respect and professionalism. Also, for the love of God, don’t ever verbalize “sales department first” to other departments. “Sales first” is an unwritten rule. The other departments need to know and be told they are important. The key point: when push comes to shove, sales comes first. When the receptionist says, “that’s not my job” to a simple, reasonable request from sales, the receptionist’s attitude is addressed, not the salesperson’s demands or expectations.
Fact #2: Your focus needs to be on attitude and activity within the sales department. A sales team with superior attitude and activity levels will always outsell a sales team with superior skill set and products. While skill set and product are important, and will be discussed in Fact #3, the actual
acts of going out and connecting with a high number of people are paramount. The most important factors are how motivated the sales team is and how many people they talk to and connect with. When you’re hiring salespeople, you’re hiring attitude. You can’t teach drive and work ethic. You’re looking for people who are hungry, with a blue-collar mentality, and a thick skin. You’re also looking for people who are extremely persistent and resilient. They need to follow through and follow up, and follow up, and follow up. Next, what is the activity level? Are they coming in early and leaving late, are they working on the weekends? Are they working on the right things? Are they selling anything? If you aren’t sure of their activity, go on calls with them. You can also call them, ask where they are, and surprise them in the field. I know of one company that tracks their sales reps activity via GPS. They are able to ensure they are making the required 10 to 12 sales calls a day, beginning by 9 a.m. at the latest and finishing by 4:30 p.m. at the earliest. For those of you cringing right now, the only people offended by this will be the people who aren’t doing what they’re supposed to be doing. Bottom line: hire attitude, set expectations around activity level, and hold people accountable. And remember, at the end of the day it’s all about production. They are either paying their way or getting the job done, or they’re not.
Fact #3: You must invest in your sales team. A highly effective sales team needs tools, resources, training, and support. Your goal is to have them spending as much time as possible prospecting, presenting, and closing. This is going to take one: support people to do paperwork, order entry, and other non-sales related items, two: tools and resources such as CRMs, computer systems, and other technology, and three: systems and processes that standardize operations and remove all guess work. Among other items, you should have selling system in place complete with scripts, competitive information, and anything else that a salesperson could possibly need during an interaction with a prospect or customer. Next, invest in the development of sales skills. While attitude and activity are most important, a sales team that also has great sales skills is lethal. Invest in learning tools such as books, CDs, DVDs, continued on page 20
14 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
FLAT RATE GUIDE for combines and ag tractors over 40HP If you have ever wished for an all-makes flat rate guide which listed realistic repair times for your service shop, then we believe your wish is granted. It covers combines and agricultural tractors over 40hp. The manufacturer lines are: Allis-Chalmers AGCO Case Case IH Caterpillar
Deere Ford IH Kubota Massey Ferguson
New Holland Steiger Versatile White
Equipment from 1980 or newer is covered in the book, and listed repair times are for internal engine components, drive-train components, and selected external components such as injection, fuel, hydraulic, and water pumps, radiators, air conditioning compressors, alternators, and starters.
Why Develop Such a Resource? There are many objectives that were followed in analyzing the entire program, but the main objectives were as follows: (1) To promote accurate estimates based upon flat rates that are compiled using ‘’real world” data. (2) To promote the use of flat rates in equipment dealer service centers as a distinct billing choice. (3) To enable dealership service managers to make realistic estimates on important jobs without having a great deal of technical expertise...open the door to a “Wider spectrum of management candidates to fill service management/supervisory positions. (4) To facilitate “all makes” service where appropriate. (5) To assist dealers in estimating repair costs on trade-in units to determine trade-in values. (6) To give dealers a fair way to analyze productivity of their own service operations and technicians. How Was the Guide Developed? Flat rates were derived by blending actual times spent by over 66 dealers throughout the country. The data was collected at the dealerships by interviewing service managers and lead technicians. The data was collected on major jobs not small jobs that could be readily sold as ‘’time and material” jobs. One thing that is important to remember is that the times stated in the Flat Rate Guide do not include appropriate diagnostic time which will be sold separately by the dealers as ‘’time’’ operations. When Was It Last Updated? In 2001, the Ag Flat Rate Guide received a major update, adding 108 more tractor models, including Caterpillar. The update also included 18 more combine models. In 2005, the Ag Flat Rate Guide was updated, adding 65 tractor models and 10 combines. How Do I Order? Contact the Northeast Equipment Dealers Association. The guide is available in two versions: a 3-ring binder or a CD. We feel the guide is an invaluable tool when dealers truly try to make their service shops a profit center of the dealership.
Northeast Equipment Dealers Association
P.O.Box 3470 Syracuse, NY 13220 1-800-932-0607 Fax 315-451-3548 Established 1901 ne-equip.com Committed to Building The Best Business Environment for Northeast Equipment Dealers Northeast Dealer | DECEMBER 2016 … 15
BY DR. BART BASI
Your Business, Not the Charity Quick! What is the value of your equipment dealership? Is it taxable income times 3? Taxable income times 5? Or is it the value of the assets minus debts? It is literally your million dollar question that you NEED to know. In the past ten years, there has been a trend in the U.S. to consolidate (and sell) companies. Many clients have contacted appraisers to assist in buying or selling a business. A component in determining the value of a company is goodwill. Often in the process of determining the value, clients are surprised at what their business is really worth beyond the net value of the company’s assets. This additional value is what is known as goodwill. Just as surprising as the additional value goodwill can add to the value of a company, is how it is formulated. This article will inform the reader of what goodwill is and how it is calculated using acceptable methods. What Is Goodwill? To even begin a discussion of goodwill, one should try to conceptualize it with a proper definition. Goodwill, in simpler terms, is the additional value of a business over its net assets. If the additional value of the business is not in the form of assets, then where does it come from? This is a tough question to answer with any precision and is the reason why goodwill is only calculated when the business is being sold. Goodwill is not only a creation of exercising scrupulous business practices for several years, but is the product of a much broader range of factors. Eight factors are typically considered by business appraisers when calculating goodwill; these factors include one or many of the following: 1) Age of the company.
2) The value of the suppliers and the products sold. 3) Quality relations between management and employees, who can add to earnings through effective employee performance and a reduction of losses from labor turnover. 4) Market area. 5) Potential growth. 6) Inventory efficiency. 7) Company location. 8) Banking relations. This list is not meant to be exhaustive, but to only offer a few possible factors in the development of the formula. From this list, however, a value is determined on a company’s excess earning capacity. In short, goodwill means the ability of the business to produce profits beyond what would normally be expected from similarly sized companies within the same industry. Additionally, an important thing to remember about goodwill is that the tax law classifies it as an intangible asset. With this classification, not only does the seller of a business clearly benefit by having a higher selling price from the value of this additional asset, but the purchaser does also. The tax law will permit a purchaser a tax deduction for the additional amount paid for a business that is attributable to goodwill. A deduction for goodwill cannot be taken all at once, but instead it must be taken ratably over a fifteen-year period. Of course, with our tax system, there is a condition; any amounts paid for goodwill must be objectively determined. IRS Method to Calculate Goodwill: Once the underlying asset method is calculated without
goodwill, and the weighted average annual earnings after taxes is calculated under the earnings capacity method, it is possible to determine whether or not the company has generated any value based upon goodwill. If the result is positive, the goodwill can then be added to the underlying value of assets to determine a true value of the asset structure of the company. There has been a misconception in the past in that many appraisers were valuing goodwill alone and using the goodwill values as a total value for the company. This is incorrect due to the fact that goodwill is an asset of a company and should be added to the fair market value of the tangible assets to determine a total value for the company using the underlying asset method. The IRS has stated, through Revenue Ruling 68-609, that when there is no appropriate basis to calculate goodwill (most of the time there is no basis), the “formula” approach may be used to calculate the fair market value of intangible assets of a business. The “formula” approach is stated as follows: A percentage return on the average annual value of the tangible assets used in a business is determined, using a period of years (preferably not less than five) immediately prior to the valuation date. The amount the percentage return on tangible assets, thus determined, is deducted from the average earnings of the business for such period and remainder, if any, is considered to be the amount of the average annual earnings from the intangible assets of the business for the period. This amount (considered as the average annual earnings from intangibles), capitalized at continued on page 18
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Call Kelli at NEDA – 800-932-0607 – or email – firstname.lastname@example.org and ask for individual prices or to purchase any of these guides.
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Northeast Dealer | DECEMBER 2016 … 17
GOODWILL continued from page 16
a percentage of 15 to 20 percent, is the value of the intangible assets of the business determined under the “formula” approach. The appraiser should be aware that the past earnings applied to the formula should reasonably reflect future earnings. If there are any abnormal years, where the annual earnings for that year do not properly reflect the businesses normal earning capacity, they should be discarded or weighted less in determining an average annual earnings figure. The percentage of return on the average annual value of the tangible assets used should be the percentage prevailing in the industry involved at the date of valuation. If an industry percentage is not available, a percentage of 8 to 10 percent may be used. This return is what a normal company in the industry would expect to receive with an investment equal to the asset base. If the business is of small risk, is stable, and has regular earnings, an 8 percent rate of return and 15 percent rate of capitalization are applied. If the risks of the business are high, then a 10 percent rate of return and 20 percent capitalization rate should be applied. It is at the appraiser’s discretion to apply a certain return on investment and capitalization rate. The factors that influence the capitalization rate include (1) the nature of the business, (2) the risk involved, and (3) the stability of earnings. To illustrate the “formula” approach, assume Company ABC has $1,000,000 net asset value under the underlying asset method. The next step is to apply a 9 percent return on assets. This would be equal to $90,000. Then, as determined by the earnings capacity method, the actual average annual earnings after taxes equaled to $150,000. If we subtract the $90,000 from the $150,000 we can determine if any profits were made as a result of goodwill. In the present situation, the difference is $60,000. We then take the $60,000 and apply a capitalization rate. In this situation, an 18 percent rate was determined to be applicable. Applying the rate results in goodwill equaling $333,333. In addition to the capitalization method, many appraisers will apply a second method to the excess earnings using a present value factor. The two methods would then be averaged. However, the second method is outside the scope of this article. A future article will explain the proper use of the present value concept coupled with an appropriate growth rate. Once goodwill is calculated, the result can be added to the underlying value of assets to determine the overall value of the company based upon the underlying value of assets method including goodwill. In the present situation, the net assets were valued at $1,000,000. Adding the goodwill determined under the capitalization approach of
$333,333, we get the value of the ABC Company to be $1,333,333. Here is a summary of how it was computed: Value of net assets from underlying asset method. . . . . . . . . . . . . . . . . . . . . $1,000,000 Average Annual Earnings from earnings method. . . . . . . . . . . . . . . . . . . . 150,000 Apply 9 percent ROI to value of net assets ($1,000,000 x .09). . . . . . . . . . 90,000 Excess Earnings (150,000 – 90,000). . . . . . . . . . 60,000 Apply Capitalization Rate (60,000/.18). . . . . . . . . . . . . . . . . . . . . divide by .18 Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $333,333 Add Goodwill to Value of Net Assets. . . . . . 1,000,000 Value of XYZ Co. using Underlying Asset Method. . . . . . . . . . . . . . . . . . . . . $1,333,333 Concluding Remarks: Don't overlook this additional method in valuing a business! Goodwill, though conceptually simple, can and often is very arbitrary. As can be seen from the above example, the most difficult part of the calculation is determining the ROI and capitalization rate. Professional guidance is necessary to maintain the objectivity of any goodwill determination, as well as to preserve the deductibility of any amounts paid for goodwill. Call Bart or Roman Basi at The Center for Financial, Legal and Tax Planning, Inc. for such assistance – 618-997-3436 or marcus@taxplanning. com.
IRS: Change in Dolly Taxation Effective in January As reported in September, the Internal Revenue Service has changed a policy of nearly 30 years on the applicability of the 12 percent federal excise tax to sales of dollies (also called converter gear or auxiliary axles). As noted, IRS accomplished the shift in position which has left dollies taxable - in a couple of internal memos from its general counsel's office to the examination (audit) division. This process, which avoided a formal rulemaking, left the effective date of the change uncertain. Now, in a letter from IRS to ATA and other interested parties, the agency says it will apply its new position on sales of dollies after the 1st of 2017. ATA continues to be involved in efforts to persuade IRS to reconsider its policy change.
18 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
~ State Laws Newsletter
24/7 Northeast Dealer | DECEMBER 2016 â€¦ 19 423726-066
One Key to Running a Great Business What is one of the most influential factors affecting your company’s success? It’s your employees—the people who are right beside you, helping to build the profit and pursue opportunities for growth. Physical assets—the buildings and equipment—support financial goals, but to carry out the directives necessary to reach those goals, a company won’t get too far without trusted employees. And, if you’re like other business owners, you have certain employees whose departure from the company could create genuine setbacks. They’re the ones with the management skills, technical know-how, experience, and customer relationships you rely on. How would your company handle the void left by a key employee’s departure or death, and the urgent need to find a qualified replacement? Are any of your key people close to retirement, or absent due to a long-term illness or disability that may prevent their return? Perhaps one of your star performers recently quit. Or, perhaps, one of your key employees passed away not long ago. With the anxiety of losing a valuable employee still fresh in your mind, it’s a perfect time to start putting a plan in place to protect your company in the event another key person leaves. Determine who your key employees are. They are the employees you could describe as the people you can’t do without—the ones you trust to make the right decisions when you’re not available. They can be at any level or in any position. And there currently may be no one who could step right in and take over their responsibilities. Remember, you’re a key person too! While it can be uncomfortable to think about one’s own mortality, concentrate on those left behind and what they could go through if you haven’t planned for your company’s future. Decide how to protect your company after losing a key employee. It’s an unhappy reality of running a business that good employees leave. And, if an employee has distinctive skills, the loss can be even harder to deal with. That person’s unique talents and expertise mean you need to fill some big shoes. Plan to spend a lot of time and effort finding a replacement. And, don’t forget money. It’s estimated that the cost to replace mid- to high-level employees can range from one-and-a-half to four times their annual salary. Are you prepared to cover that expense out-of-pocket? Few employers have that kind of extra money lying around, “just in case.” Having an important employee leave is enough of a disruption to your business. Do you want to add a financial burden on top of that? ~ Submitted by Federated Insurance Co.
What Leadership Needs to Know continued on page 20
ing, drilling, and rehearsing sales skills in sales meetings, in the car, with you and other salespeople, and even with friends and family members. You should also be throwing objections at them when you simply walk by them in the office. Preparation and knowing exactly what to say are critical.
Fact #4: Everyone and everything affects sales. Everyone affects sales at your company from the receptionist, who is the first person people come in contact with, to the janitor, who runs into people walking in and out of your building, to your truckers, your customer service people, and your salespeople. All make an impression, good or bad, and that impression helps determine whether or not people do business with you. Taking it a step further, it’s my belief that because selling is your company’s most important activity, everyone should be directly involved in sales. Everyone knows people and they should all be looking for possible prospects for your product or service. Yes, even the janitor and receptionist. If they pass on a name to the sales department and a sale is made, they should be rewarded with money, a gift, or something else of value, but all employees should be sold on your product and looking for people to help. Everything counts. From clean floors, to correct shipments, to properly spelled names, to all employees interacting with customers with caring and enthusiasm, everything sends a message as to whether or not your company is one people should do business with. Even the smallest item can affect a sale. On that note, you should be shopping your company. Call and see how the phone is answered. Ask for information. Is it sent? Does someone follow up? How and when? If they’ll know it’s you calling, have a friend or family member call. John Chapin is a sales and motivational speaker and trainer. For his free newsletter, go to: www.completeselling.com.For permission to reprint, e-mail: email@example.com or phone 508-243-7359.
NEDA 2016 HOLIDAY SCHEDULE Friday, December 23
Monday, December 26
Friday, December 30
20 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
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Northeast Dealer | DECEMBER 2016 … 21
Employer Reporting – 2016 FINAL Forms and Instructions The IRS has released the 2016 final forms and instructions for the ACA employer reporting requirement. The final forms are almost identical to the draft forms released in August, with only minor clarifying language in the instructions. While final forms and instructions have been released for both the “B” and the “C” forms, this summary focuses primarily on the updates to the “C” forms required to be used by applicable large employers. Background Under §6056, all applicable large employers (ALEs) – those averaging 50 or more full-time equivalents (FTEs) in the previous calendar year – must report to the IRS information about the healthcare coverage offered to full-time employees using Forms 1094-C and 1095-C. Under §6055, all employers offering a self-funded group health plan considered to be minimum essential coverage (MEC) must report to the IRS information about the individuals actually covered under the plan. If an ALE offers a self-funded group health plan, all information required will generally be reported using Forms 1094-C and 1095-C. If a small employer (fewer than 50 FTEs) offers a self-funded group health plan, coverage information will be reported using Forms 1094-B and 1095-B. Clarification of Existing Requirements TIN (SSN) Solicitation Process for Self-Funded Plans Guidance in regard to collecting/soliciting TINs (SSNs) for purposes of §6055 coverage reporting was provided by the IRS in August, and a reference to the proposed rules was added in the final reporting instructions. To show “reasonable cause” and thereby avoid potential penalties for not providing a TIN, or for providing an incorrect TIN, the employer is required to follow a specific TIN solicitation process for each individual enrolled under a self-funded plan offered by the employer. The proposed rules are available at https://www. irs.gov/irb/2016-33_IRB/ar10.html. In the case of an incorrect TIN, the employer is required to make three reasonable attempts to correct the information using the following steps: 1. Make an initial solicitation at the individual’s first enrollment (i.e. application for coverage submitted); 2. If the first solicitation is unsuccessful, make a second solicitation by December 31 of the year
in which the relationship with the taxpayer begins (January 31 of the following year if the relationship begins in December); and 3. If the second solicitation is unsuccessful, make a third solicitation by December 31 of the following year. In the case of a missing TIN, the employer is required to make three reasonable attempts to obtain the missing information using the following steps: 1. Make an initial solicitation at the individual’s first enrollment (i.e. application for coverage submitted) or, if the individual is already enrolled on September 17, 2015, the next open enrollment season; 2. If the first solicitation is unsuccessful, make a second solicitation at a reasonable time thereafter (i.e. within 75 days); and 3. If the second solicitation is unsuccessful, make a third solicitation by December 31 of the year following the initial solicitation. Enrollment in Minimum Essential Coverage (MEC) On Form 1095-C, the employer is instructed to use code 2C on line 16 for any month in which the employee enrolls in the coverage offered. This is generally true even if another of the code 2 series might apply for the month (e.g. code 2F if the offer meets the Form W-2 safe harbor requirements). However, the final instructions clarify that code 2C on line 16 is appropriate only if the coverage offered is considered minimum essential coverage (MEC), although most employer-sponsored group health plans will meet the definition of MEC. Affordability Safe Harbors On Form 1095-C, upon a waiver of coverage, employers may enter the applicable affordability safe harbor code (i.e. code 2F, 2G, or 2H), if any, on line 16. The final instructions clarify that codes 2F, 2G, or 2H may be used only if the employer met §4980H(a) requirements and marked “yes” for the month in Part III, column (a) on Form 1094-C. In other words, if the employer is potentially subject to a penalty under §4980H(a) for any particular month for failing to offer coverage to 95% or more of full-time employees and their dependents, use of any of the affordability safe harbor codes on line 16 of Form 1095-C is inappropriate for that month. continued on page 23
22 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
IRS Announces 2017 Health FSA Limits In Revenue Procedure 2016-55, released recently in October, the IRS set forth a variety of 2017 adjusted tax limits. Among other things, the notice addresses slightly increased limits for health flexible spending accounts (FSAs). Health Flexible Spending Account (FSA) – 2017 Annual Limitation of $2,600 Health care reform annual limitation for 2017 is $ 2600.00 on annual salary reduction contributions to health FSAs offered under Section 125 (Cafeteria) plans. NOTE – The $2,600 annual limit for health FSAs applies only to the amount that can be deducted pre-tax from an employee’s compensation to make employee contributions through a Section 125 cafeteria plan. It may help to think of this as a limit on pre-tax payroll deductions for health FSA purposes, rather than as a limit on the health
Employer Reporting continued from page 22
Summary Without any further promises from the IRS in regard to penalty leniency for a good faith effort or extended reporting deadlines for 2016, most employers and vendors will find it something of a relief to have finalized forms and instructions in hand without significant changes so that preparations for 2016 reporting may begin. Although it is likely things will go a bit smoother this year with most employers and vendors now at least familiar with the process, we recommend that employers who have not already begun preparing necessary reporting data and coordinating such efforts with reporting vendors do so soon. This will ensure that statements are prepared for individuals by the end of January and will provide additional time to handle any potential errors that may occur when filing with the IRS (by the end of February if filing by paper or by the end of March if filing electronically). Final forms and instructions: • Form 1095-C https://www.irs.gov/pub/irs-pdf/f1095c.pdf • Form 1094-C https://www.irs.gov/pub/irs-pdf/f1094c.pdf • Instructions for the “C” forms https://www.irs.gov/pub/irs-pdf/i109495c.pdf Our detailed employer reporting guide, updated to accommodate the 2016 instructions, is available at: http://benefitcomply.com/wp-content/ uploads/2010/10/Benefit-Comply-EmployerReporting-Guide-v7_Oct2016.pdf OR http://benefitcomply.com/%E2%80%A2compliance-alert-employer-reporting-2016-finalforms-and-instructions/ ~ Submitted by Haylor, Freyer & Coon
FSA itself. In some circumstances an employee can have a health FSA benefit of greater than $2600, for example: • If the employer makes contributions to the employee’s FSA accounts (see below); or • If the health FSA includes the optional $500 carryover provision and the employee has a carry-over from the previous year. Employer Health FSA Contributions Employer contributions to an employee’s health FSA are not limited by this rule, and may be made in addition to the $2,600 allowed for employee contributions. However, if a health FSA is to avoid violating health care reform requirements, it must meet “excepted benefit” status. To meet excepted benefit status, the health FSA must satisfy the following two conditions: • Maximum Benefit Condition. The maximum benefit payable under the health FSA to any participant in the class for a year cannot exceed two times the participant’s salary reduction election under the health FSA for the year (or, if greater, the amount of the participant’s salary reduction election for the health FSA for the year plus $500). In other words, the employer could either do a matching contribution or limit the contribution to $500. • Availability Condition. Other non-excepted group health plan coverage (e.g., major medical coverage) must be made available for the year to the class of participants by reason of their employment. This requirement is that the individuals must be eligible for both – both a group medical plan and health FSA are offered – not that they have to be enrolled in both. Therefore, although there isn’t technically an annual limitation on employer contributions, health care reform limits employer contributions to $500/year or an arrangement in which the employer contribution will not exceed the employee’s contribution, such as an employer match of employee contributions (up to $2,600). Summary The full text of Rev. Proc. 2016-55, including 2017 amount limitations for other taxes, may be found at https://www.irs.gov/pub/irs-drop/rp-16-55.pdf. ~ Submitted by Haylor, Freyer & Coon
EQUIPMENT INDUSTRY News EQUIPMENT INDUSTRY NEWS
Use of all articles in the Equipment Industry News pages are used with permission of Lessiter Media (LM), Ag Equipment Intelligence issue of Nov. 15, 2016, Vol. 22, Issue 11. Use of any of the articles and information contained in Ag Equipment Intelligence, Rural Lifestyle Dealer or any other Lessiter Publication Media Brands requires permission of the publisher.
Worldwide Fall Off in Farm Dealers Make First of its to kind API joins dealer management Tractor Sales ‘Likely Continue Strides in Charter Software in 2017’ Inventory Inc.’s July 2016 release software with third party suppliers includes the launch FederUnacoma, the Italian Agricultural Machinery Manufacturers Reduction Efforts, of ASPEN Integrator, Charter Software InC. Federation, expects the downturn in farm machinery sales experienced a new module that by most countries to move into 2017, according to a release issued But Underlying integrates ASPEN, on Nov. 8, prior to the start of the EIMA Ag equipment exhibition in their flagship business releaSeS aSPen Headwinds Persist Bologna. m a n a g e m e n t
While supply and demand “The negative phase for agricultural equipment purchases is software, with the imbalances continue to plague likely party to continue also in 2017, and a recovery is only expected third suppliers many Ag machinery dealers, the that use the to association. “The setback involves many of the from dealers 2018,” said threewas publicly held North American About ASPEN: ASPEN developed using Microsoft run their business efficiently. major coun¬tries, but does not affect the positive trends seen in farm equipment dealership groups .NET and SQL Server to offer dealers strong security, With ASPENmarkets Integrator dealers can now: some emerging that represent — after the emergence of are reporting progress in reducing a reliable, manageable IT infrastructure, and easy • Connect to multiple data sources including CRM India, China, Brazil and Turkey — the new frontier ofintegration agricultural their equipment backlogs. On the with Microsoft applications. packages, shopping carts, auction & equipment other hand, it has come at Software, a price as mechanization.” About Charter Software Inc.: Charter sites, manufacturers, and email and phone dealers report that ongoing low used According to data compiled by Agrievolution, through first Inc. istheheadquartered in Littleton, Colorado and systems in real time. equipment values offer little or no 9 months of 2016, the following countries and/or was regions have in 1978. Charter Software provides founded profit margin. • Keep multiple data sources current, reducing experienced declining tractor sales: affordable, Windows-based business management At the same time, factors like lease duplicate data issues caused by current software software designed to improve efficiency and increase integrations Europe –6% Russia –19% returns and individual farmers selling the profitability their of equipment dealerships. Charter China –29% Japan –24% own equipment are coming into • Run secure live queries and more quickly respond Software works closely with the equipment industry’s play, slowing dealers’ efforts to put Brazil –17% to customer inquiries leading suppliers to create streamlined EPC/ea meaningful dent in the ongoing where tractor sales increased the first 3 “At Countries Charter Software, we understand that during in commerce integration withof their software. overhang equipment on their lots. quarters of the year included: order to flourish, dealers need to be able build a “The major of this current For more information on driver Charter Software, India +17% U.S. +3% bridge between all of their technology systems. dip in used values liesormostly please visit http://chartersoftware.com/ e-mailwith at: Most business system Turkey +7% vendors in our industry do not the increasing number of machinery firstname.lastname@example.org. have anyreport meansnoted to connect, and overall the ones that do in the The that, while unit sales auctions featuring a lot more one or net U.S. were require party certification,” said Anne two used items that individual farmers up, the third increase was driven by compact unitsSalemo, (under 40 horsepower). President/CEO of Charter Software. “Dealerships own have been selling to free up some Sales of high horsepower tractors (over 100 horsepower) were down their data and should be able to extend it as necessary cash,” says Greg Peterson (Machinery during the January through September period by 22%. Pete) in his Machinery Pete’s Quarterly to maintain competitive edge. If you have a software ~ AEI Used Values Index report for the third or online tool that needs access to your customer, quarter 2016. inventory or other relevant business information, ~ AEI ASPEN Integrator is for you.”
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Please call Mark Eckles @ 402-651-5913 or Stacey Simmer @ 866-424-3150 for your next Leasing Sale. Customer Financing or Leasing Sale. 6 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer” 24 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
EQUIPMENT INDUSTRY NEWS Use of all articles in the Equipment Industry News pages are used with permission of Lessiter Media (LM), Ag Equipment Intelligence issue of Nov. 15, 2016, Vol. 22, Issue 11. Use of any of the articles and information contained in Ag Equipment Intelligence, Rural Lifestyle Dealer or any other Lessiter Publication Media Brands requires permission of the publisher.
Kubota’s Farm Equipment Revenues Nearly Flat in 3Q16 For the third quarter of 2016, Kubota’s total revenues were $3.56 billion, a drop of about 4% compared to the same period of 2015. Revenues from the Farm Equipment& Engines division were $2.42 billion, nearly flat compared to the $2.49 billion of revenues for the third quarter the previous year. Year-to-date, Kubota’s revenues for the division were $7.1 billion vs. $7.55 billion at this point last year, a decline of 5.9%. 2016 Outlook. The company revised its forecasts for revenues for the year ending Dec. 31, 2016, downward to Sales Surge $14.7 billion, a decrease of 4WD $551 million from the During October previous forecast in August. In Farm & Industrial Machinery, Kubota says domestic revenues are of While North American retail sales equipment weremachinery weak overall in forecast to decrease since theagagriculture October, 4WD sales were strong in market has continued to stagnate due to the adverse both the U.S. and Canada, according reaction to the front-loaded to demand caused by the the latest numbers released by the of Equipmentlast Manufacturers. strengthening of emission Assn. regulations year. During the month, 4WD sales Overseas revenues are alsoincreased forecast decrease 18.8% to year-over-year, while sales 27.3%. because sales growth in Northcombine America is decreased anticipated (Mig) Dobre, senior research to be lower than expected. Mircea analyst with Baird, notes this was only the third positive month for 4WD tractor sales since 2013 (December 2015 Full-Line Progress. +0.6%, January 2016 +10%). October Earlier this year, Kubota 2016 continued on month its path marked the 33rd of large ag year-over-year declines (October toward becoming a true full-line farm equipment 2015 and October 2014 down 31% manufacturer with its acquisition of Great Plains. and 25%, respectively). The addition of Great Plains’ implement lineup andand U.S. and Canada large tractor combine retail sales decreased 15% strength in North America complements Kubota’s year-over-year in October, down from acquisition of Kverneland in the May has aU.S. 14%2012, decreasewhich in September. sales were down 19% year-over-year, strong presence in Western Europe. while Canadian sales were flat. On the company’s approach to dealers, Todd 4WD tractor sales increased Stucke, Kubota’s vice president of sales andvs. 18.8% year-over-year in October 18.5% decrease in September marketing, said this summer, an “There is no mandate. (U.S. +19.7%, Canada +16.1%). U.S. On the dealer side, we wantdealer to earn thatof business inventories 4WD tractors decreased 20.8% year-over-year and entice the dealers to want to carry our brand. in September. October is typically an As far as Great Plains, it’s wherever the contract is above-average month for 4WD tractor open. If the contract is opensales, and a Kubota dealer accounting for 14.3% of annual over the last can provide the right productsales support, he5 years. may have Combine sales were slightly the right to have that contract.” worse, posting a 27.3% year-overyear decrease in October ~ following AEI September’s drop of 26.5%. U.S. combine inventories were 34.4% lower year-over-year in September vs. down 25.8% the previous month. October is typically an above-average month for combine sales, accounting for 12.6% of annual sales over the last 5 years. Row-crop tractor sales posted a 16.7% year-over-year decline, worse
4WD Sales Surge During October
While North American retail sales of ag equipment were weak overall in October, 4WD sales were strong in both the U.S. and Canada, according to the latest numbers released by the Assn. of Equipment Manufacturers. During the month, 4WD sales increased 18.8% year-over-year, while combine sales decreased 27.3%. Mircea (Mig) Dobre, senior research analyst with Baird, notes this was only the third positive month for 4WD trac¬tor sales since 2013 (December 2015 +0.6%, January 2016 +10%). October 2016 marked the 33rd month of large ag year-over-year declines (October 2015 and October 2014 down 31% and 25%, respectively). ~ AEI OCTOBER U.S. UNIT RETAIL SALES Equipment
September 2016 Field Inventory
Farm Wheel Tractors-2WD 12,322
Under 40 HP
100 HP Plus
Total Tractors Combines
OCTOBER CANADIAN UNIT RETAIL SALES
MAKE PLANS NOW TO ATTEND THE
September 2016 Field Inventory
Farm Wheel Tractors-2WD Under 40 HP
2017 NEW YORK FARM SHOW
100 HP Plus
Total Tractors Combines
U.S. UNIT RETAIL SALES OF 2-4 WHEEL DRIVE TRACTORS & COMBINES
2016 5 year average 30,000 28,000 26,000 24,000 22,000
Northeast Dealer | DECEMBER 2016 … 25 20,000 18,000
SEVERE WEATHER DRIVING AHEAD If you live in an area that gets wintery weather, does the first snowfall of the season seem to bring on a rash of fender benders and crashes? Even though we all know what happens to the roads in the cold weather, that first dose of winter can be a real eye-opener on how to drive on snowy, wet, and slippery roads or when visibility is poor. To avoid getting caught offguard when road conditions go from good to bad, a little advance preparation—for you and your car—may help you steer clear of those fender benders. First, don’t drive unless absolutely necessary. The best way to avoid an accident is to not be on the roads in the first place. If driving is unavoidable, • Slow down and plan
ahead. Allow some extra travel time so you’re not rushed and tempted to take risks. • Leave tailgating for the football game. Following too closely in perfect driving conditions is risky enough, but it’s just asking for trouble when driving is hazardous. Don’t be “that guy.” • Pay attention. Driving in poor conditions is no time for even the slightest distraction. Keep your mind on your driving, hands on the wheel, and eyes on the road. Put your phone out of reach. Learn your route ahead of time to reduce reliance on distracting navigation devices. Or have a passenger navigate.
• Make sure your lights and wipers work properly. Top off your windshield washer fluid. Inflate the tires to the recommended level. Use chains if your state allows or mandates them. • Get enough rest. Fatigue and winter driving are a dangerous combination. Add in nighttime driving and it can be a recipe for disaster. • Drive defensively. Watch out for others whose driving may not be sensible for the conditions. Extra cautious driving in poor weather can help you get to and from your destination safely. ~ Submitted by Federated Insurance Co.
This is a complete list of all First Aid Treatments. Any other treatment would be considered Medical Treatment, and thus OSHA Recordable. - Non-prescription medication - Tetanus immunizations - Cleaning, flushing, soaking wounds - Wound coverings - Hot or cold therapy - Non-rigid supports - Temporary immobilization devices - Drilling fingernails and toenails - Eye patches - Simple removal of foreign bodies from the eye - Simple removal of splinters - Finger guards - Massages - Drinking fluids for heat stress
26 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”
Please make it home safe today.
We believe you deserve more than just insurance. You deserve valuable risk management tools— like the “What is Important to You” distracted driving prevention program—designed to help you and your employees make it home safe today. Federated provides clients with access to services offered through wholly independent third parties. Neither Federated nor its employees provide legal advice.
16.08 Ed Date. 11/15 *Not licensed in the states of NH, NJ, and VT. © 2016 Federated Insurance
Outdoor Power Equipment Dealers Welcome Here! Our purpose is to improve and perpetuate the agricultural, construction and rural lifestyle dealer business. We are about helping our member dealers improving their gross margins and to sell, service and supply replacement parts to their customers successfully and profitably. NEDA is widely recognized and respected as the equipment industry organization representing the collective interests of American equipment dealers in the Northeast region.
Northeast Equipment Dealers Association
Committed to Building The Best Business Environment for Northeast Equipment Dealers