Newsletter - Spring 2004
Michigan Dealers May File a Claim for Refund of Use Tax
by Edward J. Castellani
The Michigan Court of Appeals recently held in Crown Motors of Charlevoix, Ltd. vs. Department of Treasury, that a vehicle purchased for resale, which was later resold, was exempt from use tax. Because of the decision, dealers have an opportunity to file a claim for refund of certain use taxes paid on vehicles purchased for resale purposes and resold based on Crown Motors.
This includes both use tax paid on vehicles held in inventory and later resold, and use tax on new and used vehicles used as demonstrators.
Although the Treasury Department is not required to follow the results in the Crown Motors Decision for anyone other than Crown Motors, the case provides dealers an indication how the courts are likely to rule in a case with facts similar to those in the Crown Motors case.
The statute of limitations for filing refunds is open for four years. Dealers should consult their state tax adviser to determine if they should file a claim for refund based on the Crown Motors decision.
Mr. Castellani is a member of our Business Department. He practices in the Lansing office and may be contacted at 517.377.0845 or toll free at 800.748.0436. You can also contact him via e-mail at ecastellani@fraserlawfirm.com.