Chrysler Says Connecticut Profits From Lemon Law

HARTFORD -- A car manufacturer is trying in a court appeal to put a new twist on the state's Lemon Law.

Chrysler LLC, formerly DaimlerChrysler Corp., is seeking refunds on sales-tax equivalents it repays to consumers when the Lemon Law requires it to buy back defective automobiles, but it needs the state Supreme Court to clear the way to continue its legal arguments.

Chrysler is charging that the state government is penalizing the company and unjustly profiting from Chrysler's compliance with the Lemon Law.

The state tax department and a Superior Court judge both ruled against Chrysler. Now, the automaker is appealing to the state Supreme Court.

"It could be called the height of chutzpah for a car manufacturer that sells a defective car to seek repayment for the tax paid by the consumer," Attorney General Richard Blumenthal said.

Under the Lemon Law, a buyer may return a defective new motor vehicle to a manufacturer, who must then provide a refund or comparable new vehicle and reimburse buyers for certain other charges, including sales taxes.

Chrysler says the fundamental question is one of equal treatment

"Chrysler is asking the Connecticut Supreme Court to refund the sales tax on repurchased vehicles to bring fairness to the process for consumers, retailers and manufacturers," said Elaine Lutz, a Chrysler spokeswoman.

She said a majority of states reimburse manufacturers for sales taxes refunded to consumers under their laws.

"Connecticut retailers are entitled to reimbursement of sales tax on refunds to consumers," Lutz said. "Chrysler is asking the state Supreme Court for the same treatment."

Potentially millions of dollars ride on the case. If Chrysler ultimately prevails, other car manufacturers will seek sales tax refunds, too.

Source: Republican American(online) September 3, 2007.