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Court of Appeal (Cal.) Says Vehicle Lessee Cannot Challenge Lessor’s Imposition of Use Tax on Lease-End Turn-in Fee Because Lessee Must First Submit Claims for Refund to the State of California

by Scott J. Hyman |

In LISA STETTNER et al., Plaintiffs & Appellants, v. MERCEDES-BENZ FINANCIAL SERVICES USA, LLC et al., Defendants & Respondents. Additional Party Names: California Dep't of Tax & Fee Admin., Michele Zousmer, No. C094345, 2023 WL 8818219, at *1–2 (Cal. Ct. App. Nov. 29, 2023), the Court of Appeal held that a consumer cannot challenge imposition of a use-tax at lease-end… Read More

Supreme Court (Mich.) Says Auto Finance Companies Properly Sought Tax Refunds for Post-Repossession Deficiency Balances

by Scott J. Hyman |

In Ally Financial, Inc. v. State Treasurer, State of Michigan,  2018 WL 3520302, at *6–7 (Mich., 2018), the Michigan Supreme Court found that auto finance companies properly sought tax refunds for post-repossession deficiency balances. In the present case, we have to make sense of the fifth item, “repossessed property.” The statute clearly states that “repossessed property” is not part of… Read More

IRS Says TCPA Plaintiff Gets Taxed on TCPA Settlement

by Scott J. Hyman |

In Arkow v. Commissioner of Internal Revenue, 2016 WL 7377286 (U.S. Tax Ct. 2016), Judge Vasquez held that a TCPA plaintiff failed to report taxable income on a $3,000 TCPA settlement. In December 2011 petitioner husband filed a complaint against Wyndham in the Superior Court of California for Los Angeles, California, alleging violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. sec. 227… Read More

Court of Appeals (Mich.) Finds that Post-Repossession Debt Not Deductible as “Bad Debt” under State Income Tax Laws

by Scott J. Hyman |

In Ally Financial, Inc. v. State Treasurer, 2016 WL 5107138 (Mich.App.,2016), the Michigan Court of Appeals found that two auto finance companies could not deduct their post-repossession losses as bad debt under state tax law. The procedural history sets up the issue. Plaintiffs are financing companies that financed the purchase of motor vehicles from various retailers (dealerships) around the state.… Read More

U.S. Tax Court Says that Auto Finance Company’s Charge-off of Post-Repossession Debt was Taxable Income to California Debtor

by Scott J. Hyman |

In Clark v. C.I.R., 2015 WL 5243760, at *2 (U.S.Tax Ct.,2015), Judge Cohen held that an automobile finance company's charge-off of a post-repossession deficiency was taxable income to a debtor.  The facts were as follows, and were not uncommon. Petitioner resided in California when she filed her petition.  On December 22, 1999, petitioner entered into a retail installment contract with an… Read More

Reminiscent of the Vehicle Lease-Tax Cases, The California Supreme Court Holds that the Revenue & Tax Code Provides the Exclusive Remedy for Challenging a Retailer’s Collection of Tax on the Sale or Lease of a Retail Item

by Scott J. Hyman |

In Loeffler v. Target Corp., --- P.3d ----, 2014 WL 1714947 (2014), the California Supreme Court held that California’s consumer protection codes can not supplant the limitations and procedures set forth in the Revenue and Taxation Code. Plaintiffs are consumers who contend that defendant retailer represented that it properly was charging and in fact charged them sales tax reimbursement on… Read More

Supreme Court (Conn.) Holds Vehicle Renewal Registration Fees Paid Directly to the DMV by Lessees under Car Leases Qualify as Taxable Gross Receipts

by Scott J. Hyman |

In HVT, Inc. v. Law, --- A.3d ----, 300 Conn. 623, 2011 WL 1413650 (Conn. 2011), the Connecticut Supreme Court found that vehicle renewal registration fees paid directly to the DMV by lessees under car leases qualify as taxable gross receipts. The sole issue in this appeal is whether vehicle registration renewal fees (renewal fees) paid directly to the department… Read More