TIA President David Martin: Your Voice on Capitol Hill
David Martin became involved with the Tire Industry Association (TIA) in 2012 when Bob Hendry, vice president of 31 Inc., approached him about running for the TIA board of directors.
“I was fortunate to win a spot on the board and in time became chairman of the training and education committee,” Martin says.
“This proved to be an important step forward for me in my tire industry career and has given me the opportunity to be involved in the legislative process in Washington, D.C.
“To participate in the board meetings and witness the efforts and commitment of the board of director members made me proud to play a small role in this association.”
That small roll got a whole lot bigger when Martin became the association’s president, taking the reins from Tom Formanek.
Martin has to balance his TIA responsibilities with his job as category director of tools and supply for American Tire Distributors Inc. (ATD). At ATD, he has worked with tire installers and has seen the positive effect TIA has had on the industry.
“The move to ATD has been the most important in my career. Once I joined the ATD team I came into contact with the tire installers in a different way that provided me insight into their training needs and safety concerns.
“The ATD Tool and Supply team has worked with key vendor partners to offer training from TIA-certified trainers. ATD has held more than 800 training sessions over the years while training more than 10,000 tire installers.”
Martin says being involved with TIA “has broadened my view and engagement in the industry as a whole. It also provided me the opportunity to serve as a voice of the tire installers with the National Highway Traffic Safety Administration (NHTSA) and work for a fair and equitable tire registration program for all involved and affected by the legislation. This important legislation will impact all tire installers in the United States.”
As he took over last November, TIA had approximately 10,000 members. In addition to working on tire registration legislation, Martin says he is:
- working to sustain the growth in TIA’s membership and facilitate expansion in the member services programs;
- focusing on the continued development of TIA’s training and educational programs; and
- working with Executive Vice President Roy Littlefield and the new board of directors to carry forward an effective and results-oriented government affairs program on Capitol Hill.
TIA is currently working on multiple industry-related government legislation. According to Martin, here are TIA’s positions.
The issue of Last-In, First-out (LIFO) inventory accounting method legislation
TIA continues to actively lobby Congressional members to save LIFO. We are very active in the LIFO coalition and have been conducting visits on the Hill to express to members the importance of keeping this accounting system alive for tax purposes.
Repeal of LIFO would hurt TIA members. It would significantly hinder the competitiveness of U.S. businesses in the worldwide marketplace by placing a significantly increased tax liability on the companies that use LIFO.
Should LIFO be repealed, the consequences for LIFO taxpayers would be more devastating than any other change to the tax rules.
The “new revenue” that is touted by supporters of LIFO repeal comes in the way of retroactive taxes. Businesses using LIFO would have to pay retroactive income taxes on deferments they took while using LIFO in the past. Unlike any other tax expenditures that have been discussed for elimination, repealing LIFO is the only proposal that would require a business owner to pay taxes retroactively.
Any proposed tax rate reductions would not compensate LIFO taxpayers for the damaging effects to their businesses. Taking LIFO reserves and turning them into taxable income, even spaced out over time, would wreak havoc on cash flows, capital reserves, expansion opportunities and job creation for American businesses using this method of accounting.
Saving LIFO remains a top priority for TIA.
Marketplace Fairness Act for online sales
We are very strong supporters of the act. It has the support in the Senate to pass. It does not have the support in the House because Tea Party members see this as a tax increase. We don’t see it that way. We see it as something that’s very unfair for the brick-and-mortar small businessmen in a particular town who are hiring people, who are supporting Boy Scouts, Girl Scouts, Little League teams, etc., and are at a disadvantage when somebody outside sells the product in the state and there’s a difference on the excise tax.
It’s just an unfair situation, and we’re still working on it. This affects everything our members sell, it’s not just tires.
TIA will continue to push the Marketplace Fairness Act of 2017 so that local family-owned businesses can compete fairly with large online corporations.
Recognizing the Protection of Motorsports (RPM) Act
The RMP Act is a bill that was introduced by the Specialty Equipment Market Association (SEMA) in the last Congress and reintroduced in this Congress. It was introduced in the wake of a decision from the Environmental Protection Agency (EPA) that stated street-legal cars could not be converted into race cars. The RPM Act protects Americans’ right to modify street cars and motorcycles into dedicated race vehicles and the industry’s right to sell the parts which enable racers to compete.
EPA’s decision would have had an impact felt across the industry. The RMP Act ensures that transforming motor vehicles into race cars used exclusively in competition does not violate the Clean Air Act. The EPA ended up pulling back, but it had extended its jurisdiction and scope further than it ever had on something like this. We’ve been working closely with SEMA on the RPM bill. In the House, it has 139 co-sponsors, and in the Senate, it has 38. So right now, we’re working to get this bill in front of a committee.
Retroactive Liability Provisions of Superfund
TIA remains committed to repealing the retroactive liability provisions of Superfund. Unfortunately, right now it’s not an issue that’s moving in Congress. It’s a major issue for us. We have dealers in 30 states who have been cited for the cleanup of Superfund sites. In our opinion, it’s very unfair when you make a law retroactive. You have situations where dealers were legitimately having tires picked up by EPA-approved haulers, taken to EPA-approved sites, and then somebody else dumps something in the site that they have no control over and it becomes a Superfund site. The dealers get a notice in the mail, and they have the opportunity to pay thousands for their “fair share” of the cleanup, or they can fight it to the end and still end up paying thousands. That’s not fair to dealers.
The problem is somebody has to pay for this stuff. On the Hill, the Democrats believe that generators of the waste (such as used oil, tires, used batteries or used anti-freeze) should pay for it. Dealers get hauled into that, and that means anybody who generated anything found at that site gets involved. And the Republicans are on the other side saying that you can’t put it all on big businesses, and that all companies that dumped anything in the site should be involved. We’ve testified concerning our position for our members and will continue to do so.
Lead wheel weight legislation
TIA’s position is that the marketplace will take care of this, and in a matter of time, there won’t be any more lead wheel weights. What’s happening is TIA is seeing bills introduced in states putting a deadline on a ban of the use of lead wheel weights. By 2020, or whenever, you can’t have any more lead wheel weights in the states.
TIA feels that’s unfair because dealers have inventories of lead weights that are worth a lot of money. The arguments that there’s all these lead wheel weights on the side of the road are crazy. The numbers opponents throw out are ridiculous.
So TIA is opposing lead wheel weight bills, saying let the marketplace take care of itself. The industry is shifting away from lead wheel weights anyway.
Affordable Care Act (ACA) and the Cadillac tax
This is an easy answer. TIA has no idea where we’re going on Obamacare. I don’t think anybody in Washington does.
With the Republicans in the House and the Senate and White House, many believed that Obamacare would be repealed. We did get extensions on things like the Cadillac tax, but we couldn’t make a wild guess on where health insurance is going to be a year from now.
Nobody in Congress knows, and we don’t think that there are votes to get anything through right now. So this is a major issue for our members. We think tire dealers more than almost any other group of small businesses tends to insure people to keep them. It has a huge impact on us.
The rules are so ridiculous right now. If you have 49 employees, or 50 employees, there are different regulations. You get to 100 employees and there are different regulations. It’s almost like you’re penalized if you’re growing and doing well.
The whole thing with Obamacare was everybody was supposed to be equal. That was the deal with the state tax; that was the deal with the health insurance.
We don’t know where that’s going to come out. That’s something we obviously spend a lot of time on. When we go to state conventions, we probably get more questions on health care than any other issue. We certainly were supportive of the repeal, but that’s not going to happen. We don’t know where it’s going to go now.
The opportunity for an Estate Tax Repeal
TIA is a member of the Family Business Estate Tax Coalition (FBETC). This coalition is dedicated to the full and permanent repeal of the estate tax.
With the 115th Congress, the opportunity for Estate Tax Repeal is greater than ever. HR 63 and S 205 amends the Internal Revenue Code to: 1) repeal the estate and generation-skipping transfer taxes, and 2) make permanent the maximum 35% gift tax rate and the lifetime gift tax exemption. The bill provides for an inflation adjustment to such exemption amount.
TIA supports the Death Tax Repeal Act of 2017 for the following reasons:
- Repealing the death tax would spur job creation and grow the economy. It contributes a very small portion of federal revenues.
- The death tax is unfair. It makes no sense to require grieving families to pay a confiscatory tax on their loved one’s nest egg. Often this tax is paid by selling family assets like farms and businesses. Other times, employees of the family business must be laid off and payrolls slashed.
- For many family-owned businesses to keep in operation after the death of the owner, they must plan for the estate tax. Planning costs associated with the estate tax are a drain on business resources, taking money away from the day-to-day operations and business investment. These additional costs make it more difficult for the business owner to expand and create new jobs. Protecting family businesses from the estate tax is important in order to keep these businesses operating for future generations.
We’ve been very active lobbying on this. The bill currently has 101 co-sponsors in the House. But we think the holdup on pushing it for a vote has been that we are now looking at putting repealing the death tax into broader tax reform
New OSHA requirements or fines concerning work-related injuries and illnesses
Fines are always a big issue we’re hearing about. In the past, the Occupational Safety and Health Administration (OSHA) would come in for an inspection and give you 30 days to fix something before they fined you. Now they’re coming in and giving huge fines for very small things, such as extension cords being in the wrong place, having a radio on the wrong bench, things like that.
In 2016, OSHA did over 40,000 inspections. I know President Trump has gone after a lot of these agencies, and I think this year they’ve got their hands tied a little more than they have in the past, but it’s still definitely an issue we’re talking about with our members.
When we go to state conventions, this has been another hot issue this year. At one meeting in South Carolina there were 42 dealers in the room, and they were talking about this. Twenty-six of the 42 had an inspection in the last year and they were fined somewhere between $10,000 and $35,000 for inconsequential things, whereas in the past OSHA used to say, “Fix it up; we’ll be back in two weeks. If you’ve fixed the problem, we won’t fine you.”
We’ve had a lot of issues this year with the OSHA inspections, and Internal Revenue Service (IRS) inspections on wages and hours, on payroll taxes, and on imported casings for retreads.
Infrastructure funding — the Highway Trust Fund and the Federal-Aid Highway Bill
We could write a book on this one. The government raised a trillion dollars for infrastructure spending. One of many issues is that infrastructure involves everything, not just highways. It involves — on the transportation side — ports, airports, subway systems, mass transit, etc. It also involves water, electric grids, everything. So all the money raised is not going to strictly highway projects.
This has been an issue for a long time. As an example, TIA is based in Maryland and of every dollar raised for the highways, 68 cents now goes to non-highway projects.
Where does the aforementioned trillion dollars come from? Right now there are 38 or 39 proposals in Congress. There is a White House proposal we had a briefing on, which is totally different than any of the ones in Congress. Issues in it that have concern to us are whether or not you’d put a federal excise tax back on passenger tires, what you’re going to do with truck tires. The proposals commonly seen on the Hill would raise that tax by 10%. It would raise the taxes on trucks and truck parts by 10%. That’s a general trend. Whatever you do on retreads, that’s going to be a huge issue for retreaders who are already under the gun for tariff issues.
But when you’re putting pieces together like a jigsaw puzzle, you want to look at the puzzle pieces that have the least resistance. There are fewer than 800 retreaders. There’s tens of thousands of other entities that are being looked at. It makes it difficult for groups like retreaders, and that’s why we’re there fighting for it, obviously. But there are 39 proposals and very little leadership on this one. So everybody wants to get a new highway bill. We’re just not sure how this is going to play out.
Passenger, truck and OTR tire tariffs
Tariffs are a very tricky issue for us. In the past, we have been for free trade. So in the past, we opposed tariffs. Our industry is a global industry. Some companies have facilities in places like China and India and they want to bring those tires in.
We have commercial dealers who like to have a lower-priced option for selling without the tariffs, so tariff legislation is very difficult for us. We’ve almost had to come to a position of neutrality, but we are working with different groups in the sectors like retreaders.
We bring them in and make sure their positions are known and heard. There are 777 retreaders left in the country now. Seven hundred are members. We’re very concerned about what the tariffs mean to them.
Legislation concerning minimum wage
Everywhere — cities, counties and states — are looking at that magic number of $15 an hour minimum wage. What happens is it’s really hard to get some kind of a jump that big on a federal level. It’s hard to get something that big on a state level. So what you’re seeing is more and more counties coming in and passing it, which makes it difficult for small businessmen who are on county lines. He’s got to pay this, and the guy next door doesn’t. I think you’re going to find most of our members don’t pay minimum wage, but when the minimum wage goes up, everything goes up. It’s difficult. The interesting thing in all of this is it’s usually big businesses supporting it, for a lot of reasons. They’re paying above that anyway. But it’s tough on a small dealership, a small repair shop that is holding on by its fingertips.
Work Opportunity Tax Credit (WOTC) and the VOW to Hire Heroes Act
This is a tax credit for employers who hire people from disadvantaged groups. They can get a tax break of 25%, up to 40% of the employee’s salary in the first year. So you help provide jobs for veterans, people from disadvantaged groups, whether they’re former convicts or disabled, etc. It’s something we’ve always supported in the past.
We’d love to see it become permanent. We keep trying, every time it comes up for a vote. We’ve been successful in getting it extended. A few years ago we were successful in an effort to add a category for veterans. We’re trying to do something similar right now for businesses in Puerto Rico and Houston. So it’s an ongoing issue, and with all of the budget bills going through right now, we’re trying to get things attached to those.
Motor Vehicle Owners’ Right to Repair Act
As you know, we were very involved in that on the state and federal levels. It did pass in Massachusetts. So we think that opened up the door. It’s pretty hard to have that legislation passed in one state and not have it go nationwide.
We’ve been working in a coalition, trying to work with the manufacturers to roll it out. It’s a long struggle. The domestic manufacturers have been more receptive than the foreign manufacturers. But it’s an issue we’re continuing to work on.
The act would:
- require vehicle manufacturers to provide the same service information and tools capabilities to independent shops that they offer to their authorized dealer network to repair and maintain late model computer-controlled vehicle systems;
- restore the right of vehicle owners to have their vehicles serviced and maintained at the repair facility of their choice; and,
- authorize the Federal Trade Commission (FTC) to enforce requirements in order to protect consumers and to promote competition in auto maintenance and repair.
It would not:
- affect warranty work that is normally performed by the vehicle manufacturer-authorized repair facility; nor,
- require manufacturers to disclose manufacturing processes or trade secrets unless that information is made available to the authorized repair facility.
When you have a change of administration from one party to another, it opens up a different set of laws you can go after. As examples, you could not have gone after the repeal of the estate tax under a Democratic Congress, and there’s going to be a lot of tax and workplace issues coming up.
It’s going to be a very busy next few years, and that’s why TIA is going to have a lobby day next spring. The last one TIA had was in 2016. We encourage TIA members to come and see how the system works. TIA’s philosophy is that our members are the experts and no one can tell their stories as well as they can. It is TIA’s job is to plug our members’ expertise into the right places at the right time. ■ Personal snapshot
Johnathon David Martin grew up in the small town of Jonesville, N.C. He now lives in Concord, N.C., and works for American Tire Distributors.
He started his career in the automotive industry as a Snap-on tool dealer. It was during this time he met C.E. Benton, the person who Martin says had the biggest influence on his career. They also worked together at Accu Industries, where “he helped me understand how to work with customers on an individual basis.
"He also taught me how to manage my business and the processes of making good business decisions.”
He says there have been many challenges to face in his career. “With that said, learning how to move forward regardless of the odds and how big the challenge may appear is what makes the difference between a winner and a loser.”
He has some advice for young people just entering the industry. “The best attribute anyone in business can have is to be flexible and adaptive to change,” Martin says. “Business and the automotive industry are always evolving, technology drives change, and business environments evolve into new markets or market opportunities.
“In the near future we will be riding in autonomous cars. These new vehicles will completely change the automotive market.”
Martin has a daughter, Deidra Martin Fricke, a son-in-law Aaron Fricke; and a son, Devin Martin.
Where does he see himself in 20 years? “Retired, aggravating my children, enjoying my grandchildren and playing golf.”