Licensing issues lead to state fines for Oklahoma car dealers
BY CURTIS KILLMAN World Staff Writer
Wednesday, January 02, 2013
1/02/13 at 7:31 AM
A state agency that oversees automobile dealerships has issued more than 100 sanctions in the past year to dealerships connected with employing unlicensed salespeople.
The penalties - fees in lieu of fines or outright fines - were levied by the Oklahoma Motor Vehicle Commission, which oversees vehicle dealerships and salespeople in the state.
Many of the sanctions stem from a state law prohibiting agencies from issuing new or renewed licenses to individuals not in compliance with state income tax obligations, said Roy Dockum, executive director of the commission.
A 2000 law requires state agencies each year to submit the names of those holding or applying for professional licenses to the Oklahoma Tax Commission. The Tax Commission returns a list of those with tax issues to the agencies.
The law was intended to encourage people to pay state taxes, or risk losing their license to do various kinds of work, including selling cars.
"We are prohibited from issuing a renewal license if their name is on the list," Dockum said. "We have no idea why, whether it's failure to file or back taxes."
The number of requests for compliance checks from the state Motor Vehicle Commission increased from 4,913 last fiscal year to 6,045 in fiscal 2012, according to information from the state Tax Commission.
The compliance checks were based on existing license holders and it was unknown how many individuals actually sought to renew their license.
Of the 6,045 potential applicants, the Tax Commission sent letters to 1,082 people deemed noncompliant, records show. Individuals can comply by working out a payment arrangement with tax officials, Tax Commission spokeswoman Paula Ross said.
"We always work with the taxpayers to get the issue resolved," Ross said.
The Tax Commission sent the Motor Vehicle Commission a list of 877 people still considered non-compliant after being given a chance to work matters out with tax officials.
"If those persons are still employed after 30 days ... then the dealership can be fined for employing an unlicensed sales person," Dockum said. "Usually it takes about one fine and then the person comes into compliance or that person has to find a job somewhere else."
The Motor Vehicle Commission in the past year has approved 104 agreed settlements in lieu of fines with vehicle dealerships that had employed unlicensed individuals.
The panel issued fines in nine cases since December 2011 to dealerships employing unlicensed salespeople for extended periods of time.
Agreed settlements usually resulted in a dealership paying $100 for each case involving an unlicensed person, but ranged up to $500. The total amount in agreed settlements approved since December 2011 was $20,650.
Fines totaling $4,500 were also levied. A typical fine, which also required a dealership representative to attend the hearing, was $1,000.
Only a few dealerships have reached the maximum fine since passage of the law, Dockum said. Of 274 dealers in the state, the Motor Vehicle Commission sanctioned 47 dealerships for employing an unlicensed salesperson, records show. Most dealerships are paying the fines in hopes that the salesperson can get his or her tax issues resolved, said Steve Rankin, president of the Oklahoma Automobile Dealers Association.
"The dealers that are paying the fines, they are saying, 'We want to keep these sales people until they can get their business squared away with the state,'" Rankin said.
When the law was approved in 2000, an estimated 500,000 people held professional licenses issued by state agencies.
The state Health Department, which issues a wide range of professional licenses, handles non-compliance issues at the administrative level, according to a spokeswoman for the agency. The number of individuals sanctioned in the past for working without a valid license was not immediately available.
The state Real Estate Commission occasionally deals with individuals caught operating without a valid license, but rarely handles cases involving delinquent tax issues, said Lisa Hays, deputy director of the commission.
Meanwhile, such sanctions were rare at the state agency overseeing used car sales.
Among the Oklahoma Motor Vehicle Commission sanctions, about half of the dealerships involved only had one case before the agency in the past year.
A Norman dealership was one of the exceptions with 14 agreed settlements in the past year involving unlicensed salespeople.
John Hunt, general counsel for the Norman Chrysler Jeep Dodge, said most cases before the commission were related to a mix-up in the dealership's human resources office. That led to several license applications not being submitted to the Oklahoma Motor Vehicle Commission.
"We wish we could say it wasn't our fault," Hunt said.
New employees have been hired and new policies enacted to avoid a reoccurrence, Hunt said.
The remaining cases involved salespeople with tax compliance issues, Hunt said.
"We tried to work with them, but a couple we had to terminate because they could never get their tax issues straight," Hunt said.
Original Print Headline: Licensing issues lead to fines for car dealers
Curtis Killman 918-581-8471