Dep't of Revenue v. General Motors LLC, Fla.
Dist. Ct. App. (12/5/12).
A Florida Court of Appeal recently held that an auto
manufacturer was not subject to state sales/use tax on vehicle parts/repairs made pursuant to its customer warranty because the right to participate in the warranty progam and to receive repairs was part of the
consideration that its customers received in exchange for the purchase price of
the vehicles.
The Court affirmed that the trial court did not err
in concluding that the tax due for such repairs was paid as part of the original
sales transaction, and that to impose a second round of tax on the transaction
would amount to double taxation or “pyramiding of tax” prohibited under Florida
law.
The Florida Department of Revenue unsuccessfully argued that the
discretionary nature of repairs provided under the Case-By-Case program by
dealers distinguished it as taxable relative to the nontaxable repairs provided
under the manufacturer’s base warranty program. The Court explained that the
substantial repair costs associated with the warranty program furthered the
position that such repairs were factored into the original vehicle sales
price.
