N.Y. Comp. Codes R. & Regs. tit. 20 § 534.9

Current through Register Vol. 46, No. 45, November 2, 2024

Section 534.9 - Refund of sales or compensating use tax to consumers who have recovered the purchase price or a portion of such price from the manufacturer of a motor vehicle pursuant to section 198-a or 396-p(5) of the General Business Law

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.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 534.9