SCHULTZ, MYLO (1999) (F) (ST)
Topic Code: V036Vehicles Subject to Registration (ST) Document Reference: 99300079
February 26, 1999Mylo D. Schultz3510 Guadalajara Road SWCedar Rapids, IA 52404RE: Docket No. 98-30-2-0272 Sales/Use Tax ProtestDear Mr. Schultz:The Iowa Department of Revenue and Finance has reviewed your protest. This letter sets forth the department's position on this matter.On or about September 14, 1998, you purchased a vehicle from Don Miller Dodge, Inc. The purchase price was $17,700.00 and you paid Iowa use tax of $885.00 when you registered the vehicle in this state. Within a few weeks you apparently decided you were not satisfied with the vehicle, so you requested a refund from the dealer. You received a refund of $16,200.00, which was the purchase price less a $1,500.00 "restocking charge." You filed a claim for refund with the department November 5, 1998. The department issued a letter dated November 17, 1998, denying the refund.The department's review finds there is no factual discrepancy. Therefore, based on the facts, the department must deny your protest. Department rules have the force and effect of the law and are presumed valid. Hope Evangelical Lutheran Church v. Iowa Department of Revenue and Finance, 463 N.W.2d 76 (Iowa 1990), Richards v. Iowa Department of Revenue, 360 N.W.2d 830 (Iowa 1985). The department finds rule 701—34.3 IAC is applicable to this situation: 701—34.3(423) Returned vehicles. When a vehicle subject to registration is sold and later returned to the seller with the entire purchase price refunded, the purchaser is entitled to a refund of the use tax paid. To obtain a refund the purchaser must be able to show that the entire purchase price was returned and provide proof that the use tax had been paid. See rule 701—30.11(423) for details on claims for refund. This rule is intended to implement Iowa Code sections 423.1 and 423.7.You did not receive a refund of the entire purchase price. You had possession of the vehicle for approximately six weeks. Mileage records indicate you drove the vehicle 3,683 miles. The dealer agreed to take back the vehicle and refund you $1,500.00 less than what you paid. The department's position is that it does not matter how the dealer phrases the $1,500.00 charge. The rule is very specific and calls for a refund of the entire purchase price in order to obtain a refund of the tax.If you agree with the department's position or choose not to pursue the protest, please inform me in writing within thirty (30) days of the date of this letter. That response will allow me to inform the Administrative Law Judge that the parties have resolved the matter, no issues remain, and the case may be closed.If you disagree with the department's position and wish to pursue the protest, please inform me within thirty (30) days of the date of this letter. The department will then file an Answer to the protest, thereby initiating contested case proceedings. The Administrative Law Judge will notify both parties of a time and place for a hearing on this matter.If you have any questions, please contact Jeff Aten at (515)281-6463.Sincerely,David L. Casey, ManagerAudit Services SectionCompliance Division