Chrysler Turns Sour Over State Lemon Law Decision

HARTFORD, CT — The state Supreme Court has ruled the Chrysler auto company can't get sales tax refunds on clunkers that it has to buy back under the state's Lemon Law.

The high court unanimously held that the state government's general immunity from lawsuits trumped the legal claims that Chrysler made.

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

Chrysler argued the state government is penalizing the company and unjustly profiting from its compliance with the Lemon Law.

The company contended that it loses sales tax on every vehicle it must buy back, but the state keeps the original sales tax, and it collects new taxes paid when a consumer uses a refund to buy a new car.

The state Department of Revenue Services and a Superior Court judge both ruled against Chrysler. The company appealed to the Supreme Court. The appeal sought to revive its legal challenge.

Paul Hughes - Republican American