Has anyone tried to determine how much sales tax the Insurance companies have saved under the NAGS rebalance? Or how much sales tax the state's are losing from the NAGS rebalance?

You know I just read an article on that yesterday, actually it may have been a court thing or a house bill somewhere.. why can't I remember hell it was probably GlassBytes Anyway it stated some figures regarding how much states lose based on insurer "LOWBALLING" estimates and the tax paid on the actual work performed at these lowball rates versus the tax that would be paid on actual invoice amounts as set by repairer.

Where they are saving is this...

If the average part BEFORE rebalance was $200 and labor was flat $45 lets say for StateFarm, tax rate of say 5% to keep it easy, tax collected was what? $10 on materials, $0 on labor (non-taxable).

But now, if the average part AFTER rebalanceis even $100 and labor is now flat $100 (state farm again), same tax rate 5%, the tax collected on that very same part is now $5, and $0 labor (non-taxable).

The states lost sales tax of $5 per invoice (or roughly had their sales tax revenue from auto glass companies cut in 1/2 by the insurance companies). Then the state also loses income tax revenue as well, as WE all lost $45 a job under the rebalance (assuming we are all NOT corporations that do not pay income taxes).

Can you see what I am getting at?

The simple fact of switching the majority of an invoice to LABOR, thus dramatically lowering the only TAXABLE item (in most states) the MATERIALS, the insurance companies are saving a good chunk of change everyday by NOT paying the sales tax amount they were BEFORE rebalance. of course, I am sure they will agrue that the NAGS rebalance was OUR industries idea, and they had NOTHING to do with it.

We have already begun discussions with out state tax commission on this very subject.

ccc...That all makes sense and is most likely true. But also one must consider the simple, crappy fact that cash prices have declined in large markets so much (30-50%??) in the last few years that there is the likelihood that many more consumers are able to afford glass repair/replacement since the bottom has fallen out of cash prices. That could possibly generate tax revenue that is lost by the rebalaning. Also in our state, labor is taxable, so the bottom line is still fully taxed.
Personally I think the less taxes politicians have to spend, the better off we all are.

Why would you want to talk to your State tax commissioner? The old structure was out of whack. How many businesses charge a 400% markup on their parts and labor under $100.

The problem is the fact that we allow, and the insurance companies get away with, telling us how much we can charge, and that amount being the same whether you use quality parts and supplies, compared to cheap ones and/or experienced professional tech's as compared to hacks.

Off the top of my head, I think a bill of $180 for parts and supplies on parts that cost you $120(50% markup) and labor of $65 per NAGS (or whatever system car repair shops use)hour at an average of 2.5 hours, would be pretty fair.

That is exactly my point. We are talking to them to further explain what has happened to this industry, how the insurance companies are dirving down prices, near 60% since 1996.

The idea of shifting to a realistic list with a MARKUP on parts and chaging labor times and rates more in line with other industries is NOT the problem.

The problem came in when the insurance companies demanded further discounts on the parts, and maintained the flat labor rates some had before rebalance.

We are not telling the tax commission to change NAGS, or tax labor to compensate, we are merely dicussing the current situation in our industry and how that has in some ways effected their department as well.

If we never make policymakers aware of companies and our industry and the situations taking place in it, NOTHING can be accomplished. They have so many plates on their tables already and new plates being shoved into their mouths everyday by lobbyists that you have to touch bases with them, and talk to them on a regular basis. It is all part of the game they call BUSINESS these days.

Perhaps nothing will change on the political side, but without an effort, we know nothing will.

I believe there is a pretty good paper trail to show how it was done in our industry. Take all the O&As before rebalancing. Take all the published glory of what rebalancing was going to be. Compare those to what has happened since. It's not hard to tell that rebalancing was a tool to save sales tax dollars in the states that don't tax labor. The local sales tax rate here is .0825 with the state, city, and metro taxes combined. I really don't want those increased because some big entity has the power to pull something like this off. Throw in all the other industries that are being hammered the same way by the same entities and the sales tax dollars lost are probably mind boggling.

The State Comptrollers should at least do an audit comparing the differences in sales tax dollars collected on each part # before and after the rebalance. I think they would be very surprised to find that the individual invoice totals are the same or higher and the sales tax collected per invoice is probably around 30% lower.

Unfortunately, that's not even a feasible possibility.

This is getting out of hand. I just received a fax from Hartford wanting 46% off of nags with 110 flat labor. Does anyone know how to get around invoicing through the SGC network? Fair and reasonable my ass!! I'm *******

I personally feel the NAGS rebalancing worked out just fine, I have no issues with it. I however do take exceptions with a few part # prices which i have addressed with NAGS, I honestly wish nags published prices every month , or 2 months not ever 3 it too far out...

I don't use nags or support them. SGC & LYNX does We might be better using factory warantee times and prices with their part no. I still have my first Mitchel Books from 1964 but it seems they are in bed with the enemy now. What good would even monthly worthless prices be?

Secret Agent BTO, How do you figure the rebalancing worked out fine? Doesn't it seem we're almost back to where we were... what with the new discounts and all?

If you use dealer parts can you charge dealer LIST prices? Let the TPA's try to tell you that DEALER labor rates and DEALER list prices are not correct to price from.

Any judges in the crowd willing to offer insite on this one?

Sounds like a hassel buying parts from the dealer, that is my opinion, who knows? I HATE to go to the dealer but i have atleast 5 ppl a week with weird NEW or weird old stuff thats dealer, its a big pain in the rumpuss, cause i hate to make a customer wait.

larry