Connecticut Supreme Court Affirms Ruling on Worthless Accounts

A financial services company appealed a prior decision that stated they could not claim a refund of Connecticut sales and use tax remitted to the state on behalf of customers that eventually defaulted on automobile loans that the taxes were collected on. The financial service company purchased the loans from the automobile dealers. However, under the language of Connecticut law, the auto dealers were considered to be the proper sellers of the vehicles that were sold and remitted the taxes to the state. The Supreme Court found on appeal that the dealer statute was not applicable to the financial services company. For this reason, the transaction fell outside the guidelines set in the statute for the exemption. (DaimlerChrysler Services North America, LLC v. Commissioner of Revenue Services, Connecticut Supreme Court, June 28, 2005)

Posted on November 21, 2005