Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, § 1139(f)
(a)
General.
(1) Section
1139(f) of the Tax Law
provides that a consumer may obtain from the Tax Department a refund of the
sales or compensating use tax paid on the purchase price, capitalized cost and
fees and charges, or portion thereof, refunded to the consumer by a motor
vehicle manufacturer pursuant to the provisions of section 198-a or 396-p(5) of
the General Business Law.
(2)
Section
198-a of the General Business Law (the New
Car Lemon Law) provides that under certain circumstances where a new motor
vehicle does not conform to the manufacturer's warranties, the manufacturer, at
the option of the consumer, shall refund to the consumer the full purchase
price of the vehicle plus certain fees and charges. In the instance of a leased
vehicle the consumer must receive the capitalized cost of the vehicle plus
certain fees and charges. Section
198-a(a)(8) of the
General Business Law defines the term
capitalized cost as the
aggregate deposit and rental payments previously paid to the lessor for the
leased vehicle less service fees.
Service fees means the
portion of a lease payment attributable to:
(i) an amount for earned interest calculated
on the rental payments previously paid to the lessor for the leased vehicle at
an annual rate equal to two points above the prime rate in effect on the date
of the execution of the lease; and
(ii) any insurance or other costs expended by
the lessor for the benefit of the lessee.
The amount refunded to the consumer, whether the vehicle is
purchased or leased, may be reduced to reflect the extent of use of the vehicle
by the consumer.
(3) Section
396-p(5) of the General
Business Law requires, with certain limitations, that disclosure be made to the
consumer of any repairs made to a new motor vehicle after shipment from the
manufacturer to the dealer, including damage to the vehicle while in transit.
If such disclosure is not made, the consumer may be eligible for a full or
partial refund of the purchase price, including any trade-in allowance plus
certain fees and charges. The amount refunded to the consumer may be adjusted
to reflect the extent of use of the vehicle by the consumer as well as
modifications made to the vehicle by the consumer.
(b)
Refund under section
1139(f) of the Tax
Law.
(1) The tax to be refunded will
not exceed the actual tax which was computed and paid on receipts subject to
tax as evidenced on the invoice given the consumer. Should only a portion of
the purchase price or capitalized cost and fees and charges be refunded to the
consumer, then the tax must be prorated accordingly.
(2) The tax refund claim must be submitted in
a processible form, as described in section
534.2(a)(2)
of this Part.
(3)
(i) The tax refund claim must be filed within
three years of the date the consumer received the refund of the purchase price
or capitalized cost and fees and charges, or portion thereof, from the
manufacturer.
(ii) For purposes of
this subdivision, the consumer will be presumed to have received the refund of
the purchase price or capitalized cost and fees and charges, or portion
thereof, from the manufacturer on the date of issuance appearing on the
manufacturer's refund check to the claimant. Alternatively, the claimant may
establish the date that such refund was received by furnishing any other
evidence satisfactory to the Commissioner of Taxation and Finance.
(4) Interest payable on the
refunded tax will be computed from the date that is three months after the date
the application form is received by the Tax Department in processible
form.
(c)
Refund
with respect to used motor vehicles.
Section
198-b of the General Business Law (the
Used Car Lemon Law) requires that if, after a reasonable period of time, the
dealer or its agent fails to correct a malfunction or defect as required by the
warranty which substantially impairs the value of the used motor vehicle to the
consumer, the dealer shall accept the return of the used motor vehicle from the
consumer and refund to the consumer the full purchase price, or in the case of
a lease contract all payments made under the contract, including sales and
compensating use tax, less a reasonable allowance for any damage not
attributable to normal wear or usage, and adjustment for any modifications
which either increase or decrease the market value of the vehicle or of the
lease contract, and in the case of a lease contract, shall cancel all further
payments due from the consumer under the lease contract. The vendor is also
entitled to a refund or credit of any sales or compensating use tax refunded to
the consumer for the return of the defective motor vehicle in accordance with
and provided the vendor meets the conditions stated in section
534.6(a)(2)
of this Part.
