Dealership miscalculated sales tax

[quirkybar8]

Just another not-lawyer with an opinion, but from https://www.upcounsel.com/unilateral-mistake comes this.

A unilateral mistake is a mistake or misunderstanding, which results from one party's misinterpretation of the terms of a contract or one party's unintentional provision of erroneous information when forming a contract

Palpable, Unilateral Mistake
As a general rule, when dealing with a unilateral mistake, if the non-mistaken party is aware of or should have been aware of the other party's mistake, it becomes a “palpable, unilateral mistake,” making the contract voidable by the mistaken party.

Voidable, Palpable, Unilateral Mistake
For instance, the Department of Defense is accepting bids from tech companies to develop a system to detect nuclear activities and report their locations and intensities anywhere on the planet. Different tech companies turn in their bids. Most of the bids fall within the range of $2.5 billion and $3 billion.

One bid, however, comes in at $500 million. The Department of Defense quickly accepts the $500 million bid and awards the contract to the bidding company. A couple of days later, the company finds out some mistakes in the calculation that resulted in their erroneous $500 million budget that should have been $2 billion.

In a case like that, the contract is voidable by the company because the sharp difference between the $500 million bid and the next lowest bid should have served the Department of Defense as a clear indication of an error somewhere. Therefore, the Department of Defense either knows or ought to know about the mistake, which makes it a palpable, unilateral mistake that renders the contract voidable.

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[Floyd]

So I know I just just hit post on the last one. But it was sitting their while the "finance manager" called back.

Long conversation. After pulling teeth he offered half and half. I countered with halfsies and bedliner. He said no.

Apparently he is the "sales manager" I finalized the deal with and holds both titles. He claims he is the last option to talk with and will not budge.

His stance is he's been paid by me and Ford. If the tax is not paid the vehicle cannot be tagged, and not his problem.

Put the conversation on hold.He's gonna be back in the office noon on Friday. Got some research/ calls to make tomorrow.

My first reaction is to take halfsies and small claims his ass for the other $800.

$800 almost seems worth it to be done with it.

[/QUOTE]
In Illinois the dealer can not release a vehicle without having the registration (tags)ordered.
If you don't have tags, the dealer may be in trouble with the Secretary of State.

 

[Big Blue]

Just re-read your original post. Not sure what you sales tax is, but did they miss it completely? $1600 is 4% on $40,000.

Also not sure how your states department of revenue works their sales tax. In Wisconsin for licensed businesses which you dealer is, the business is responsible for collecting and reporting state and any county and local sales tax based on the businesses address not the buyers. Whether they build it into the price or add it on is their choice. On private vehicle sales it is collected from the buyer at time of registration. The DMV just passes it on to the department of revenue.

IMHO your dealer owes it

 

[DukeCanBuildit]

Just re-read your original post. Not sure what you sales tax is, but did they miss it completely? $1600 is 4% on $40,000.

Also not sure how your states department of revenue works their sales tax. In Wisconsin for licensed businesses which you dealer is, the business is responsible for collecting and reporting state and any county and local sales tax based on the businesses address not the buyers. Whether they build it into the price or add it on is their choice. On private vehicle sales it is collected from the buyer at time of registration. The DMV just passes it on to the department of revenue.

IMHO your dealer owes it

Taxes range from 2.9% to 11.2% in CO. Depends on your municipality and county. Still, at the highest tax rate, the $1,600 error makes up a third of the taxes. At the lower rates, it could actually be all of it. The dealer likely input the wrong municipality/county or missed it all together. Big mistake!

 

[jsphlynch]

Taxes range from 2.9% to 11.2% in CO.

HOLY CRAP!

 

[VAMike]

unilateral mistake that renders the contract voidable.

1) I'm not sure that a guy buying a truck (as opposed to the DoD) is expected to know what the tax rate is, and that it was calculated incorrectly by the dealership (who would be presumed to have expertise/experience in doing so, unlike the customer).
2) even if a court found that the customer was expected to know and voided the contract, that just means the dealership gets back a truck that's probably depreciated a heck of a lot more than $1600--so I'm not sure this changes anything.

 

[NickTheEnforcer]

F-Them.
F-That.

Oldest trick in the book. Sell you a car and come back for more. This is Bull Schisse of the highest magnitude. F-Them in the @.

1. If it is true and accurate - so what. Cool story bro. That tax was part of the contact I signed and if you F'd up then that's your problem not mine. I'm not in the business of paying for your ineptitude. I have a duly executed contract that will stand up in a court of law. Bring it Mo-Fos!

2. If this isn't true and they are stringing you for profit money - so what. Shady dealership. Burn that relationship and tell them to suck the fuzz off your big hairy ford driving nutz because you are smarter than the average bear and you aint falling for this. I have a duly executed contract that will stand up in a court of law. Bring it Mo-Fos!

In either case - burn them. Burn that relationship. Never go back. They are either shady or incompetent and it isn't worth your time to figure out which. They can rot in the pit of filth they created.

#IveBeenDrinkingCanYouTell ?

colorful way to put it but agree. They will keep making mistakes they should not when someone else gets to pay for their 'tuition'.

All the years I've been in construction I've always strived to own my own or any team I've been in charge of [errors]. I have debited repeated issues against employee bonus plans to make them feel some pain. That usually works, when it does not you gotta send them down the road. Construction errors can kill a job quick! what kills me is when sales under-sells price out of the gate, then we are expected in development/purchasing/field to 'save' the day by working extra hard pulling a rabbit outta out hat. I've been the bad guy more times then i can recall where I've kicked a sale back to head of that dept. to either fix it or kill it.

Errors are an unfortunate cost of business just like slippage/theft, you can minimize it with best practices and effective controls but it will never be totally eliminated. Thats why business is run with an aggregate GP/gross profit margin over specified time, you dont make all your profit on one sale or one home. Some you do well when you sell hi or at your 'list' and it gets executed flawlessly. Then you have some where the clients beat you up on price, have overly high expectations or are high maintenance. Those are the ones that it never fails someone makes a mistake on and it becomes a low-earner you have to fight through to be able to get it to the finish line. For my industry once a job starts to go sideways someone super capable usually has to jump in before it goes into a death-spiral... JMO

 

[NickTheEnforcer]

Might be worth a call to the State Attorney Generals office just to see what their take is - been yrs since I used then but I found them to be responsive and at least with my issues helpful.

And as I think you might have said - give it some to time as what usually transpires behind the scenes is some damage repair/infighting at the dealership as no one wants to eat that many $$, so stand your ground, it's their mistake.

State SA is a good path to try, JMO but small claims is a joke. Most sales contracts these days require binding arbitration anyways...

 

[Fawnbuster]

Just re-read your original post. Not sure what you sales tax is, but did they miss it completely? $1600 is 4% on $40,000.

Also not sure how your states department of revenue works their sales tax. In Wisconsin for licensed businesses which you dealer is, the business is responsible for collecting and reporting state and any county and local sales tax based on the businesses address not the buyers. Whether they build it into the price or add it on is their choice. On private vehicle sales it is collected from the buyer at time of registration. The DMV just passes it on to the department of revenue.

IMHO your dealer owes it

Also at least in Indiana, if you trade a vehicle in (provided you have equity) that money they give you for trade in reduces the sales taxes owed on the vehicle being purchased new or used. Excise tax is a completely different tax and that is collected only when you plate the vehicle. There is a title fee always owed to the bmv however you do not have to plate the vehicle as long as it's never used on a public road and in some municipalities as long as it's not visible from the road etc. In other words it's a collector item always trailered or maybe a farm pick up that's always off road on your farm and not visible from the road which could label it as an abandoned junk vehicle in some jurisdiction.

 

[D Fresh]

Everyone has a boss. Sales manager answers to the general manager and or owner of the dealership. I wouldn't pay a red cent just based on their screw up, attitude and a binding written contract. Being willing to work with them is one thing, their attitude throws that out the window for me.

Agreed working on contacting GM and or owner today.

Coffee and Sober Brain working this AM.
License Plates and Sales tax are not connected. One department knows nothing of the other. And there is no law that says they have to charge you sales tax. Any retailer can sell anything they like without the additional charge of sales tax - they just have to eat the sales tax when they file taxes annually or quarterly. What the law does do is allow them to pass that tax on to you if they like, and almost every one does.

Easiest thing to do is to wait them out. Tell them you ain't taking the bait and magically your plates will arrive in the mail or how ever you normally get them.

If you want some leverage, there are attorneys that will send a letter for a small fee of $50 to $150. You can even add that fee in on the letter and tell them youare expecting them to pay it and taking them to small claims court, not to contest their invalid fee but to get your $150 back for legal counsel about a scam they were pulling. It's even possible that a judge could award you up to 3 times your losses as a form of punitive damages.

In our state tags and taxes are linked. Waiting them out won't work unless I want a Ranger paper weight.

They wrote the contract, not you. They are the experts in paying sales tax, not you. I have no legal training, but I believe these factors are in your favor.

They also may be liable for loss of use.

Agreed wholeheartedly.

Really interested in seeing how this turns out. I think everyone can agree that morally the dealership is responsible, but legally (please note, I have no formal legal training) it appears a bit more hazy.

I suspect that the sales contract included some CYA language formally intended to protect the dealer from honest miscalculations. Indeed, since the sales tax rate could be different for every customer (if calculated based on where the buyer resides rather than where the dealer is located), I could see this being a reasonable clause. But $1600 is a pretty big "miscalculation" and there's no way the sales tax rate varies that much county-to-county. (Edit to add: Per a post later in this thread, it does vary that much!)

If you negotiated on the out-the-door price, rather than the purchase price, you might have more of an argument. On the other hand, I don't know how you prove that you agreed on $X price out the door if it isn't preserved in writing somewhere, and it probably isn't (there's a reason the salesmen won't let you keep that little 4-square sheet that they wrote everything on during the negotiations).

Have you checked online reviews of the dealership for reports of similar shenanigans? Your argument for fraud or negligence is quite a bit stronger if you can show that this isn't an isolated incident.

Regardless of how this turns out for you, make sure to file a report with the state attorney general. The AG's office almost certainly won't help you, but a couple of reports like yours and they'll surely take action against the dealer, thus ensuring they can't do this to other people.

You can also post reviews, contact BBB, pass the tip to your local news station, etc. Just be very careful about the potential for libel.


Not true, at least in the states I've lived in. Licensing can verify whether sales tax has been paid, and will not give you title until it has been paid. They do this to ensure no one evades their tax bill by buying in a neighboring non-sales tax state or when buying from a private party.

I don't think this will work. Dealer has zero incentive to act if OP tries to wait them out, since they already have their money and the state is focused on getting their cut from the OP. OP will just end up with an untitled truck sitting in his driveway. Got to be proactive in this case.

You've got it.

As you said, morally their in the wrong. Legally they MIGHT be good.

Might be worth a call to the State Attorney Generals office just to see what their take is - been yrs since I used then but I found them to be responsive and at least with my issues helpful.

And as I think you might have said - give it some to time as what usually transpires behind the scenes is some damage repair/infighting at the dealership as no one wants to eat that many $$, so stand your ground, it's their mistake.

When talking to folks today I'll remind them that $800 is a drop in the bucket compared to what the damage to their reputation could cost.

I bought my 2020 Ranger in the Denver metro area. Would you mind sharing which dealership this is that can't do a simple sales tax calculation and then causes all sorts of grief for one of their customers?

Barbees Freeway Ford

Doug Lawrence (sales manager/finance manager)
Dustin Vigil (salesman)

Again, I just purchased a Ranger beginning of December. Once we agreed on a price document(s) were drafted as a ‘contract’. I live in Massachusetts so our sales tax is pretty much the same as yours. I paid a fee for them to do the RMV transactions. The sales tax was a line item listed in the contract as part of my fees. If it wasn’t there it’s on them. Once I sign the dotted line that’s it. By law you can’t go back and change it. Any court of law would uphold that opinion.

Hope youre right.

Just another not-lawyer with an opinion, but from https://www.upcounsel.com/unilateral-mistake comes this.

A unilateral mistake is a mistake or misunderstanding, which results from one party's misinterpretation of the terms of a contract or one party's unintentional provision of erroneous information when forming a contract

Palpable, Unilateral Mistake
As a general rule, when dealing with a unilateral mistake, if the non-mistaken party is aware of or should have been aware of the other party's mistake, it becomes a “palpable, unilateral mistake,” making the contract voidable by the mistaken party.

Voidable, Palpable, Unilateral Mistake
For instance, the Department of Defense is accepting bids from tech companies to develop a system to detect nuclear activities and report their locations and intensities anywhere on the planet. Different tech companies turn in their bids. Most of the bids fall within the range of $2.5 billion and $3 billion.

One bid, however, comes in at $500 million. The Department of Defense quickly accepts the $500 million bid and awards the contract to the bidding company. A couple of days later, the company finds out some mistakes in the calculation that resulted in their erroneous $500 million budget that should have been $2 billion.

In a case like that, the contract is voidable by the company because the sharp difference between the $500 million bid and the next lowest bid should have served the Department of Defense as a clear indication of an error somewhere. Therefore, the Department of Defense either knows or ought to know about the mistake, which makes it a palpable, unilateral mistake that renders the contract voidable.

This non lawyer had read that a court may simply "correct" the mistake as well.

My head hurts.

In Illinois the dealer can not release a vehicle without having the registration (tags)ordered.
If you don't have tags, the dealer may be in trouble with the Secretary of State.

Tags don't come from dealerships here. They come from the State

Just re-read your original post. Not sure what you sales tax is, but did they miss it completely? $1600 is 4% on $40,000.

Also not sure how your states department of revenue works their sales tax. In Wisconsin for licensed businesses which you dealer is, the business is responsible for collecting and reporting state and any county and local sales tax based on the businesses address not the buyers. Whether they build it into the price or add it on is their choice. On private vehicle sales it is collected from the buyer at time of registration. The DMV just passes it on to the department of revenue.

IMHO your dealer owes it

They missed municipal tax. Yep about 4% of it.
Dude @ dealership claims that in the paperwork I signed to confirm tax rate. Have to consult paperwork to verify.

Taxes range from 2.9% to 11.2% in CO. Depends on your municipality and county. Still, at the highest tax rate, the $1,600 error makes up a third of the taxes. At the lower rates, it could actually be all of it. The dealer likely input the wrong municipality/county or missed it all together. Big mistake!

Yep. Thought I was in unincorporated area of the County. Missed the city tax.

State SA is a good path to try, JMO but small claims is a joke. Most sales contracts these days require binding arbitration anyways...

Thankyou.

 

[VAMike]

They missed municipal tax. Yep about 4% of it.
Dude @ dealership claims that in the paperwork I signed to confirm tax rate. Have to consult paperwork to verify.

Here's another way to think about it: honestly, if they'd put the right number down for tax, would you have gotten up and walked out? This stuff usually comes at the end of the price negotiation, not the beginning. Does it really change anything? If they'd put the right number down then would you be unhappy today? I'd personally take their offer as an added bonus on the deal, above what you would have gotten in the normal course of events.

 

[Kevreh]

They missed municipal tax. Yep about 4% of it.
Dude @ dealership claims that in the paperwork I signed to confirm tax rate. Have to consult paperwork to verify.


Yep. Thought I was in unincorporated area of the County. Missed the city tax.


Thankyou.

This won’t be a popular view but try to get something to make up for the hassle, but pay it and move on with your life. Yes they screwed up, but if they didn’t you would have had to pay it anyway. They’re the middle man between you and the city, they didn’t collect what they were supposed to on behalf of the city.

Maybe you can get X free oil changes, something that doesn’t cost them too much.

 

[Rinn69]

Once they have you sign and close the deal that’s a legal and binding contract. To come back later and attempt to change that contract cannot be enforced. They eat it

Not to mention the $$$$ they charge just to do the paperwork....type a little on the computer, feed the documents into the old dot-matrix printer......that will be $500, thank you.

 

[wanted33]

This won’t be a popular view but try to get something to make up for the hassle, but pay it and move on with your life. Yes they screwed up, but if they didn’t you would have had to pay it anyway. They’re the middle man between you and the city, they didn’t collect what they were supposed to on behalf of the city.

Maybe you can get X free oil changes, something that doesn’t cost them too much.

I'm going to have to agree here. Looking at this with an outsiders view you may not hold any cards in your hand. The trucks in your name, and the tax is owed to the state. The dealer could just say they aren't going to pay the bill, or eat the money. And, you may wind up paying monthly payments on a truck you can't drive. And, if you go the lawyer route you'll wind up paying much more than the $1600 tax owed in lawyer fees. I'm not trying to show any disrespect, but just thinking this through to an end that may not be to your liking. Good luck.

 

[dtech]

This won’t be a popular view but try to get something to make up for the hassle, but pay it and move on with your life. Yes they screwed up, but if they didn’t you would have had to pay it anyway. They’re the middle man between you and the city, they didn’t collect what they were supposed to on behalf of the city.

Maybe you can get X free oil changes, something that doesn’t cost them too much.

I missed the part where the op said he didn't know he was in a municipality and not an unincorporated area - that being the case he is responsible for paying the appropriate tax, and yes you do sign paperwork in CO stating that you've given the correct info. The dealer is not at fault , they just calculate the rate based on information provided. Yes the sales tax can be steep in CO but still people flock to this state.

The dealer price for my Ranger was $32.2k but out the door came to some $37k and that I don't think covered the vehicle registration, in CO the dealerships have to calculate taxes on where you reside - at one time it wasn't that way as taxes were calculated on dealer location but that changed a long time ago.

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