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.
Las week was the first time I ran the heat since I bought it in March. There is no smell with fan or A/C but with heat there is an odor. It's very hard to describe, may be acrid or plasticky. I haven't driven enough with the heat on to decide if it's subsiding.
The key is to use several changes of paper towels. Otherwise you are just smearing the stuff around. You can use a clean microfiber cloth for the final pass for the best result.