This is an important announcement for Pennsylvania Member Dealerships, Member Auctions, and Member Industry Allied Industry Businesses.
The PIADA chapter of MARIADA is proud to have worked for our Member Dealerships and with State government officials to obtain the legislative solution in Pennsylvania Act 77 of 2008 that allows for a reasonable annual adjustment to the Document Preparation Fee, based on the Consumer Price Index, that may be charged by eligible licensed Dealers.
The U.S. Department of Labor (“DOL”) announced on January 18, 2017, the Urban Consumer Price Index (“CPI-U”) increase over the past 12 months. Based on a CPI-U increase of 2.1% for the period December 2015 to December 2016, the Maximum Permissible Document Preparation Fee for 2017 Allowed in Pennsylvania is increased by $3 for electronic document preparation work and by $2 for paper document preparation work to:
- $138 for electronic document preparation work. In other words, a licensed Dealer that has an Agent Contract with PennDOT and that provides electronic transaction services for document preparation may impose a maximum charge of $138 for such work.
- $116 for paper document preparation work. In other words, a licensed Dealer licensed dealer that has an Agent Contract with PennDOT and that does notprovide electronic transaction services but instead provides paper transaction work for document preparation may impose a maximum charge of $116 for such work.
Questions & Answers regarding the Document Preparation Fee:
Who is eligible and allowed to charge a document preparation fee?
A licensed Dealer that has an Agent Contract with PennDOT may charge a customer a dollar amount up to the maximum Document Preparation Fee for preparation and completion of documents required or associated with title and registration of a vehicle. The maximum Document Preparation Fee amount depends on whether it is for electronic ($138 maximum) or paper ($116 maximum) document preparation work.
If the licensed Dealer that has an Agent Contract with PennDOT processes the vehicle title and registration using paper and then sends it an Online Agent to be processed electronically, how much can that same Dealer charge the customer for a Document Preparation Fee?
Maximum $116 PLUS the actual cost of a reasonable Messenger Fee (no markup allowed) charged by the Online Agent for electronic processing of the work to PennDOT. However, if the licensed Dealer that has an Agent Contract with PennDOT processes the vehicle title and registration itself electronically, then the Dealer may charge the electronic document preparation fee up to the maximum $138 PLUS the actual cost of the online registration transaction provider fee (refer to your Dealership’s online provider contract; no markup allowed).
Additional Guidance on the
Document Preparation Fee:
Document Preparation Fee is OPTIONAL, meaning the Dealer is not required to impose such a fee but may do so.
- Not a State Fee.
Document Preparation Fee is NOT required by any State Agency to be imposed. Instead, it is an optional Dealer-imposed fee.
- Negotiable Dollar Amount.
Document Preparation Fee is NEGOTIABLE, meaning the Dealer is not required to charge the maximum amount of $116 (paper) or $138 (electronic) and may charge a lesser amount in either case.
- May Not Be Pre-Printed on Forms.
Document Preparation Fee may NOT be pre-printed on any form because it is a negotiable amount between Dealer and Customer.
- Not Required in Advertised Vehicle Price.
Document Preparation Fee is NOT required to be part of the advertised prices of the vehicle. (However, the document preparation fee is required to be listed separately on the vehicle sales invoice as stated in sections 11 and 13 below.)
- Post on Sign at Dealership.
Document Preparation Fee is required to be posted on a sign in plain view of customers inside the Dealership.
Document Preparation Fee is enforceable as an unfair practice by the Pennsylvania Office of Attorney General.
- Adjusts Annually.
Document Preparation Fee adjusts annually based on changes to the Consumer Price Index.
- Paper Processing at Dealership that then Uses Third Party Online Registration.
A Dealer with an agent contract with PennDOT that processes by paper and then sends the paperwork to an electronic online agent acting as a messenger service can charge up to the maximum paper document preparation fee ($116 maximum) PLUS the actual non-marked up cost of the Messenger Fee. For example, a Dealer processing by paper may charge a maximum of $116 Document Preparation Fee in 2017, PLUS the actual online registration fee or messenger fee (at PIADA using online provider $9 for Members, $18 for Nonmembers as of 1.18.2017).
- Electronic Processing.
A Dealer with an agent contract with PennDOT that processes electronically itself at the dealership may charge up to the maximum electronic document preparation fee ($138 maximum) PLUS the actual cost of the online registration transaction provider fee (refer to your Dealership’s online provider contract; no markup allowed). The Dealer may not add a messenger fee because there is no messenger component to such work.
- Not Subject to Sales Tax.
Document Preparation Fee is not subject to Pennsylvania sales tax as of the date of this Guidance document provided the Dealer with an agent contract with PennDOT: (i) lists the fee separately on the vehicle sales invoice, and (ii) states a fee amount that does not exceed the maximum fee amount allowed. This was confirmed unofficially by the Pennsylvania Department of Revenue.
- When Refund of Fee Is Required.
Refunds are required such as when a Dealer with an agent contract with PennDOT and that is processing title and registration on a paper basis charges more than the paper document preparation fee maximum amount. For example, a document preparation fee of $138 for paper processing by the dealer, even if sent for electronic processing to an online electronic agent and messenger service, would require a refund of at least $22 representing the difference between maximum paper $116 versus maximum electronic $135 document preparation fee. Another example is if a deal is initiated to be done online, such as through CVR, but then cannot be completed online and must be handled manually by PennDOT, then the amount above the paper Document Preparation Fee maximum must be refunded or not charged to the customer.
The Document Preparation Fee must be separately itemized on the vehicle sales invoice.
- Notary Fee.
The Dealer with an agent contract with PennDOT that has a licensed notary on staff at the dealership processing the transaction may charge a separate notary fee of up to $5 per seal for title work actually being notarized by that licensed notary.
This is not legal advice or accounting advice. For legal advice, please consult your attorney. For accounting advice, please consult your accountant.