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REVENUE DEPARTMENT ISSUES STATEMENT ON AUTO REBATES

 REVENUE DEPARTMENT ISSUES STATEMENT ON AUTO REBATES
 HARRISBURG, Pa., Jan. 24 /PRNewswire/ -- Revenue Secretary Eileen H.


McNulty said today that recent public accounts have inaccurately portrayed the commonwealth's position in a lawsuit concerning sales tax refunds for manufacturer's rebates or discounts on new cars or trucks.
 The inaccuracies apparently relate to a class action civil suit filed in the Bucks County Court of Common Pleas. The suit seeks damages for buyers of new cars or trucks who may have paid sales tax on rebates or discounts between May 1986 and April 1988.
 "Recent media accounts have inaccurately indicated that purchasers from that time period can receive a refund if they apply to the department," McNulty said. "That is wrong, they can only become part of the class action lawsuit. There has been no settlement or determination of that lawsuit."
 McNulty noted that the department made numerous refunds during the late 1980s because that was within the three-year statute of limitations for making the refunds. The lawsuit seeks refunds for purchasers beyond the three-year limit.
 Refunds of sales tax were made in some instances because the auto industry changed the way it handled manufacturer's rebates. Initially, the auto industry would charge the full amount for the vehicle and offer a mail-in rebate. In this case, the full price of the vehicle, before applying the discount, was taxable. In the mid-1980s, the industry altered its way of doing business and began offering the discount at the time of sale. In this case the lower cost of the vehicle, after applying the discount, would be taxable.
 McNulty said that if anyone is inappropriately charged sales tax on a rebate, they would be eligible for a refund up to the three-year statute of limitations.
 The Bucks County Court hearing the lawsuit has directed the Commonwealth to notify those who likely purchased a vehicle during the time period in question. That is being accomplished by including information about the lawsuit in motor vehicle renewal forms issued by the Pennsylvania Department of Transportation.
 McNulty said that the notification only allows a person to become a part of the class action. Contrary to some inaccurate accounts, no refunds are being issued to those beyond the statute of limitations.
 The lawsuit in Bucks County is not the first litigation on the issue. A previous lawsuit was dismissed by the Commonwealth Court and the dismissal was upheld by the Pennsylvania Supreme Court.
 /delval/
 -0- 1/24/92
 /CONTACT: Rod Snyder of the Department of Revenue, 717-787-6960/ CO: Department of Revenue ST: Pennsylvania IN: SU:


KA -- PH012 -- 3240 01/24/92 11:25 EST
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Publication:PR Newswire
Date:Jan 24, 1992
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