Archive for Saturday, June 11, 2011

State orders dealerships to stop giving vehicles with dealer plates to KU athletic department

June 11, 2011


A vehicle with dealer plates is parked Thursday in lot on the west side of the Anderson Family Football Complex on the Kansas University campus. The Kansas Department of Revenue has ordered car dealers to no longer use dealer plates on vehicles they have donated to a Kansas University athletic department program.

A vehicle with dealer plates is parked Thursday in lot on the west side of the Anderson Family Football Complex on the Kansas University campus. The Kansas Department of Revenue has ordered car dealers to no longer use dealer plates on vehicles they have donated to a Kansas University athletic department program.

The Kansas Department of Revenue has ordered car dealers to change their practices when it comes to donating vehicles for use by Kansas University coaches and other athletic department employees.

The state’s Vehicle Dealer Licensing Bureau has notified five dealerships across the state to no longer use dealer plates on vehicles they have donated to a Kansas University athletic department program that provides cars to select coaches and employees.

The state contacted the dealerships after hearing concerns from a member of the public and from the Douglas County treasurer that the use of dealer tags was shorting Douglas County of property tax dollars.

“It probably is not the crime of the century by any means,” said Douglas County Treasurer Paula Gilchrist. “But we are concerned about it. These are fairly new vehicles that normally would have above average property tax bills attached to them.”

The county receives no registration fees or property taxes on cars that are tagged with a dealer’s tag, Gilchrist said.

How many cars?

A spokeswoman from the Kansas Department of Revenue said the use of dealer tags as part of the KU program was a clear violation of dealer tag law. The law allows the owner of a dealership and sales personnel to use the plates on cars that they drive on a regular basis. But the law does not allow the plates to be used on cars regularly driven by people outside of the dealership.

“Our director of vehicles was pretty emphatic that there is not a gray area here,” said Jeannine Koranda, a spokeswoman with the department.

Koranda declined to release the names of the dealerships the department contacted about the matter. She said the department was not planning to assess any fines against the dealerships because the state is confident that the dealers will now start complying with the law.

Koranda did not have an estimate of how many vehicles may have been improperly tagged or for how long. The Journal-World made a Kansas Open Records request to Kansas Athletics this week seeking more details about the number of cars that have run dealer tags on them in 2010. But the request was unable to be filled because the department had not located records showing the requested information about the tags.

Judith Pottorff, corporate counsel for Kansas Athletics Inc., did confirm that the department currently has 75 vehicles in the courtesy car program, called The Wheel Club. She said none of the cars currently has a Kansas dealer plate on it, although some Missouri dealerships continue to use the dealer license plates. Pottorff said she could not speculate on how many of the cars prior to the state’s order ran with Kansas dealer tags.

Providing vehicles

Gary Bennett, general manager of Laird Noller Automotive in Lawrence, said his dealership provides the athletic department with three vehicles for the program. He said two of the vehicles always have been tagged with standard license plates that required payment of property taxes and fees. But he said one vehicle that was changed out every 3,000 to 5,000 miles did run a dealer tag. He said he thought the limited use of the vehicle allowed for the dealer tag, but he said he understands the state’s position.

“We don’t have a problem with it,” Bennett said. “We’ll do whatever the state wants us to do.”

According to information on the athletic department’s website, it is the responsibility of the dealer to register the car that is donated for athletic department usage. The car remains in the dealer’s ownership.

A representative with Lawrence-based Crown Automotive also confirmed that it provided vehicles for The KU Wheel Club program. But he said dealer tags were not used, although it was unclear whether he was referring to current cars in the program or whether they had never been used in the past. The representative declined to comment further.

Without knowing how many vehicles have been tagged with dealer plates — or for how many years — Gilchrist said it was difficult to estimate how many tax dollars the county has lost. But, as an example, a 2010 Lincoln Navigator — a type of vehicle known to have been driven by KU coaches — would generate about $985 in registration fees and property taxes for a single year.

“For us, this really just comes down to the county’s position of treating all taxpayers the same,” Gilchrist said.

New or used?

The dealer tag issue also has other implications. Koranda, with the state, confirmed that vehicles that have been tagged with a dealer’s plate can still be sold as new vehicles rather than used vehicles. Once a standard tag has been placed on a car, it can never be sold as new.

Attempts to reach Kansas Athletics spokesman Jim Marchiony for comment about the issue weren’t successful. Previously, he has said The Wheel Club program was an appropriate way for the athletic department to help attract and retain quality employees. It appears the program has grown in size since the Journal-World last reported on it in 2004. Today the program has 75 cars. Back then it had about 65.

Athletic department employees are allowed to drive the vehicles for personal use in the “immediate Kansas area,” according to the department’s website. The use of the vehicle is counted as an employee benefit and the employee pays tax on the benefit, Pottorff said.

Dealerships that participate in the program are given points in the athletic department’s priority point system related to tickets. Dealers also qualify to purchase two men’s basketball tickets per car, and may receive complimentary tickets to football, women’s basketball and other athletic events, according to the department’s website.


skinny 6 years, 6 months ago

They could put state tags on these vehicles and they wouldn't have to pay taxes on them anyway!

Bear55 6 years, 5 months ago

Actually they can only put a state tag on a vehicle used for the University. Not the Athletic Dept.

Wayne Propst 6 years, 6 months ago

LJW has reported salery and perks of KU athletic emplyees in the past...let's see a new updated accounting....will they have to be taken to court to get it?

bornon7 6 years, 6 months ago

Things never change. The rich keep getting richer. Seems the more money you have, the more free things you get! Entitlement. Shame!

Godot 6 years, 6 months ago

Do these "quality employees" receive a 1099 from the dealerships for the value of the use of the cars?

Haiku_Cuckoo 6 years, 6 months ago

The article states that the cars remain in the dealer's ownership.

Haiku_Cuckoo 6 years, 6 months ago

So if my boss lets me borrow his car to pick up supplies, I'm supposed to fill out a 1099 and pay tax on that? That doesn't make sense.

Haiku_Cuckoo 6 years, 6 months ago

Nobody bought me the car. It's my boss' vehicle. He just gives me permission to use it. It's a big pickup and whenever I borrow it, it's mainly for work purposes, but he also let me use it when I helped my brother move. How do I calculate how much tax I owe whenever I borrow his car?

gl0ck0wn3r 6 years, 6 months ago

No, they don't. Employees are also not taxed on massive amounts of free athletic clothing and private cellular phone use on company phones. The wheel club program has been going on for at least two decades and the cars have almost always been dealer tagged.

KU_cynic 6 years, 6 months ago

Yes, I think the imputed value of car use is included as taxable income.

It sure should be.

Alceste 6 years, 6 months ago

Do these sports guy pay for anything out of their own pocket? Particularly given the money they're "earning"?

Tim Quest 6 years, 6 months ago

There are a lot of jobs out there that come with company cars. Your jealousy is showing.

Alceste 6 years, 6 months ago

You mean like the President has?

We got Lew Perkins taking no charge "physical therapy"; we got sports guys stealing tickets; we got sports guys making money at "camps"; we got sports guys getting free lunches everywhere from here to Timbuktu.

It ain't about jealousy: It IS about contempt.

somebodynew 6 years, 6 months ago

Yes, and those cars are owned and registered in that company's name, NOT the dealership. Thus the proper taxes get paid and later someone is not buying a "new" car that has thousands of miles on it.

bornon7 6 years, 6 months ago

Jealousy? Nope. The dealerships are getting "Trade" back from the KU Athletic Dept. the article states.

somebodynew 6 years, 6 months ago

Yes, a "business" that has not been operating correctly (according to the State) and is sucking tax dollars away from the County (taxpayers). Like I said, other businesses have company cars, but they are registered as such and pay what they are supposed to. This has just been a "sweetheart" deal the car dealers make out on. No taxes paid - tickets to games - good will from AD - AND then get to sell the car as a new car. Not bad.

And then people wonder why the athletes themselves don't see anything wrong with taking free stuff when offered.

Bob Forer 6 years, 6 months ago

College athletic culture is permeated with greed and corruption.

Godot 6 years, 6 months ago

The legislature needs to take away the tax-exempt status of the university athletic businesses.

compmd 6 years, 6 months ago

So the people get defrauded out of many thousands of tax money, and the dealers likely defrauded whoever bought the KUAC loaners by selling them as new. And the county responds with a stern finger shake and a "you better not do that agaaaaiiinn." But its ok, KUAC only beats us because it loves us. We were the ones in the wrong asking that they abide by the law and pay their taxes. It really is good, you just dont understand.

Im an angry taxpayer. The county and state need to go after the dealers and KUAC and get their money. They want to talk about fair taxation, they ned to take the money they are owed plus penalties. If any of us failed to pay our taxes, thats what would happen to us.

irvan moore 6 years, 6 months ago

the cars will be sold as demonstrators or executive cars, the average person will be able to figure out that a car with 11,000 miles on it is not "brand new never used", it's just not "preowned". The cars will be sold at a discount (unless the new owner is the guy/gal the salesman dreams of that thinks it's more valuable because a coach used to drive it).

BigPrune 6 years, 6 months ago

This issue goes back decades. I remember Roy Williams always drove a new Lincoln Town Car with dealer plates, and it's common knowledge that coaches before him got a freebie car as well from a dealer. I bet this goes back to the 1950's. It's nice the officials have turned a blind eye all these years and nothing is going to happen for these violations, except now someone has to pay.

Too bad KU doesn't have to pay any property taxes since we provide them a gigantic fire station. Too bad we don't impose a fee to all the transient students who get a free ride on the T bus (though they never use it, that the students voted in) that the citizens pay for, or all the streets they destroy, not to mention all the accidents they cause by their poor driving, or the spending out of town they do since their parents typically buy the big ticket items in their home town (like cars), or KU moving of major sports games to Kansas City that local businesses don't get to benefit from.

A cost / benefit analysis is called for. :)

BigPrune 6 years, 6 months ago

The West side of Lawrence pays far more in taxes than the other parts of Lawrence. I'm not really sure what massive road with low density you speak of - surely you're not referring to Kasold with 4 times the traffic load than say, Massachusetts. Oh, and those cul de sacs were paid for by the developer of each respective housing development when they went in, NOT the City.

Godot 6 years, 6 months ago

Now that the Arts are off the the government teat, it is time to wean Big Athletics. Big Athletics is (or could be, if they were not taxexmpt and therefore able to pay their employees exorbitant salaries and benefits) the most profitable business in Kansas, yet they pay no property or income taxes. Cut them loose. May the biggest, baddest team win.

Russell Fryberger 6 years, 6 months ago

All I ask for is a raise every once in a while.

Vinny1 6 years, 6 months ago

Wow. Half the people that have commented on this article either didn't read it, didn't comprehend it, or are just too ignorant to get it.
A quarter of the people that commented are just jealous or envious of KU athletics and people higher in society than them in general.
And a quarter of the people that commented read, understand the article and don't look like complete idiots in their comments.

Dog 6 years, 6 months ago

I read the article, understood it and am not jealous that there are groups of people that feel they are above the law and can use loop holes for their own personal gain. In this case to get seats or better seats to KU games. I cannot also comprehend why they are not being asked to be accountable. If you or I had not paid our taxes I am sure that we would not be forgiven and asked to do better in the future.

This is about ethics and professionalism. It appears that the law isn't as blind as we would like to think.

BigAl 6 years, 6 months ago

Some of you people crack me up. You have absolutely no idea what you are talking about.

Like someone said above, if these cars (and there aren't many) are tagged to KU, NO TAXES would be paid on them anyway. The coaches and AD officials that do benefit from this are getting 1099's and they do have to claim this as income. I am not 100% sure but I think there are only 2 vehicles with Dealer tags. The bottom line on this is that there was one disgruntled person out there that wanted to complain. There is very little to see here and there is no big conspiracy. At this time, even the 2 dealer tags have now been replaced. No big deal.

Yes, the dealers donating these cars do get good seats. But, anyone that gives to the Williams fund can get good seats. This is called "payment in kind" and there is absolutely nothing wrong or sinister about it.

gl0ck0wn3r 6 years, 6 months ago

No, they aren't getting 1099's unless that practice has changed very recently.

kujayhawk 6 years, 6 months ago

Can't Gill afford his own car? They need to go after family and friends of dealership owners, too.

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