ELFA Voices Concern About Equipment Finance Provisions in Michigan Farm Debt Mediation Proposal
October 30, 2017 Michigan testimony to the Senate Banking and Financial Institutions Committee.
ELFA Testimony Criticizes New York Cybersecurity Proposal
ELFA opposition testimony before the New York Assembly Committee on Banking on December 19th, 2016. This hearing was called to review a proposed Department of Financial Services cybersecurity regulation that ELFA faults as being an overly prescriptive, a one-size-fits-all regulation that fails to take into account multiple standards that already exist and are being implemented successfully.
New York Cybersecurity Regulation
ELFA November 14, 2016 NY Cybersecurity Comments to the Department of Financial Services
California Lenders License Law Revisions
The California Department of Business Oversight has responded to questions posed in the ELFA Request for Interpretive Opinion relating to implementation of the new Finance Lenders License legislation, Senate Bill 197. See these California Lenders License guidelines.
Massachusetts Public Comment and Testimony
ELFA believes that contract terms should be negotiated between the contracting parties to reflect their needs and not blanket mandates by government with no consideration of their individual interests. See document House Bill 211 - Leased Office Equipment.
ELFA Letter to Illinois Department of Revenue
This document contains questions sent to the Illinois Department of Revenue by ELFA about implementation of new regulations sourcing Illinois sales tax at "the physical location of the property at the time the parties enter into the "conditional sales agreement" as found at 86 III Adm. Code 130.2010 (A).
Cook County Illinois Tax Defeated in Court
On August 4, in Reed Smith v Cook County Department of Revenue the Appellate Court of Illinois First Judicial District struck down the new Cook County, Illinois non-titled tangible personal property use tax on tangible personal property used in the county that was purchased outside of Cook County (e.g., computers, furniture, pencils, construction materials, equipment, etc.). ELFA State Government Relations Committee Chairman Valerie Pfeiffer, Tax Coefficient reports the decision is not yet on the court website but provided a copy of the decision.
California Electronic Recycling Fee Change Effective January 1, 2017
On January 1, 2017, the California Electronic Recycling fee rates are set to change from the current rates of $3, $4, and $5 to $5, $6, and $7 depending on the viewable diagonal screen size of the equipment. Lessors are responsible for proper collection
even if exercising the option for vendors to voluntarily collect and remit the fee. Visit the Information on Collecting the California Electronic Recycling Fee
page for more details.
Texas Dealers Heavy Equipment Inventory Tax
ELFA is reaching out to members and allies to advocate for changes to the Texas Dealers Heavy Equipment Inventory Tax (TRS Tax Code §26.1241) which threatens to increase tax burdens on lease finance companies with equipment interests in Texas.
Automatic Renewal Clauses
ELFA believes that all contract terms, including automatic renewal terms, should be properly and adequately disclosed and cautions against legislative attempts to dictate contract provisions between a lessor and lessee.
- Existing Automatic Renewal Laws [Members Only]
- Wisconsin Automatic Renewal Law in Effect [Members Only]
Contracts entered into on or after May 1, 2011 for the lease of business equipment or for providing business services must comply with specified disclosure requirements; contracts that will renew or extend after July 1 must comply with specified notice of renewal requirements.
- Louisiana Automatic Renewal Law In Effect [Members Only]
Contracts entered into on or after January 1, 2011 for the sale or lease of products or services in Louisiana must provide disclosure of any automatic renewal clause and the cancellation procedures.
In 2011, state legislators across America introduced bills assigning liability for disclosure of private information stored on digital copiers to various parties including - and occasionally specifically targeting - the leasing company. ELFA advocates for a responsible, informed approach that accounts for existing security technologies and the responsibility of the information collector/end-user of equipment to ensure the security of information they manage.
California is the first and only state to institute an Advance Recycling Fee (ARF) to pay for its Electronic Recycling Program. ELFA opposes the ARF due to the difficulty lessors face in collecting the fee and supports the Extended Producer Responsibility (EPR) model adopted by 25 states as of July 2011.
Electronic Recycling Testimony
Colorado Sales Tax Collection in Local Jurisdictions
In 2013 the Colorado Department of Revenue changed policy by declaring an out-of-state lessor that leases property in a local jurisdiction has created an obligation to collect sales tax in that local jurisdiction. Prior to this change in policy, out-of-state lessors were only required to collect a use tax (a lower rate) which excluded many state administered city and county taxes. ELFA questioned this reverse in policy in an ELFA Letter To The Colorado Department of Revenue concerning state administered local sales tax on leases that are not vehicles. Reasoning behind the decision to change policy was provided in a Colorado Department of Revenue Response to ELFA. The Department subsequently posted a (insert) notice delaying implementation until July 1, 2015. Accordingly, for leases that start on or after July 1, 2015, the Department of Revenue policy requires out-of-state lessors to collect the higher sales tax rate on equipment leases in Colorado based on the location of the equipment. Motor vehicle leases still follow policy outlined in Colorado Department of Revenue’s FYI Sales 56.
Illinois Sales Tax Regulations
In the wake of the Illinois Supreme Court decision in Hartney Fuel Oil Company v. Hamer, 2013 IL 115130 (November 21, 2013) that invalidated the state's regulation on sourcing for local sales tax and prompted release of new sourcing rules, ELFA submitted comments to the Illinois Department of Revenue.
Michigan Business Tax: The Michigan Business Tax (MBT) that established problematic barriers to true leasing has been replaced by the Corporate Income Tax (CIT) as presented in House Bill 4361 and House Bill 4362. HB 4361 replaces the complexities of the MBT with a 6% corporate income tax and eliminates a number of income and business tax exemptions. HB 4362 is companion legislation. Bank leasing subsidiaries will be taxed by the Net Capital Tax under the unitary reporting concept. ELFA member involvement has been the key to years of collaborative advocacy with the Michigan Bankers Association.
North Carolina 2011 Sales Tax Decrease: The North Carolina Department of Revenue has issued guidance for lessors that the July 1, 2011 state sales and use tax rate decrease to 4.75% applies to all existing equipment leases. ELFA members should examine the Important Notice linked below for complete information, especially local tax application.
North Carolina 2009 Sales Tax Increase: ELFA has received guidance from the North Carolina Attorney General's Office on the proper application to existing lease contracts of the 2009 1% sales and use tax increase.
Sales Tax on Personal Property Tax: ELFA has sought guidance from several states to the application of sales and use tax on personal property tax collected by a lessor from a lessee.
Streamlined Sales Tax Project (SSTP): The SSTP is a voluntary multi-state compact to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance. ELFA supports and is an active participant in the SSTP.
Puerto Rico Sales Tax: In 2006 Puerto Rico instituted a sales and use tax system to replace an underperforming general excise tax on imported goods.
Securitization: ELFA has lobbied in conjunction with allied associations on legislation of interest.
TRAC State Statutes:
- Kentucky has enacted Terminal Rental Adjustment Clause (TRAC) legislation found in Section 101 of Senate Bill 97. Upon implementation it will allow up or down adjustment of rent to accommodate a difference between projected value of a vehicle and its actual value upon lease termination. New Mexico now stands alone as a state not yet enacting TRAC.
- TRAC State Law Links
Links are offered solely for the convenience and easy reference of the reader and not as legal advice. Last updated September 20, 2011.
- TRAC Statutes from the American Automotive Leasing Association
State statutes in states with TRAC laws.
To learn more, please contact:
VP, State Government Relations