MINI dealer made mistake on taxes, want me to fix it
 

I live in Chicago and purchased my MY MC a few weeks ago at Knauz Mini (and absolutely love it, it's so much fun! P.S. Dan at Knauz was a pleasure to work with and order from). When I ordered the car I was quoted a price, inclusive of tax. When the car arrived the price got adjusted down since I decided to trade in my old car and there was a small problem with not getting exactly what I'd ordered (I ordered gray interior, it came black). A new final price, including tax, was agreed upon and I paid for the car.

Just a few days ago I got a call from Dan saying that they had charged me at the wrong tax rate and that I owed them more money. I told him that as we had signed a contract agreeing to terms I didn't think it was my responsibility to correct their error. Today I recieved a voicemail from the financial person at the dealership saying that the tax collection by the dealer is a courtesy and that if I don't pay them the city/county will charge me a penalty.

I'm not sure what to do. It seems that in retail, if a shop makes an error in charging tax, they eat that error and don't attempt to make the customer pay more after the fact. Are they telling the truth, is it my responsibility to make sure the taxes are paid or is it theirs? How do I know that they won't find another error next week and ask me for more money?

What do I do?

that sounds messed up... i would say that since ur order was screwed up AND you've already signed a contract with a stated price.. they should eat it unless they want u to let everyone on this public forum know what they did (even though u already did)... word of mouth travels faster than any advertising u can buy and BAD word of mouth travels even faster...

Does your agreement for the price, including tax, itemize the tax? Or, did they just give you the bottom line amount? If it itemized the tax, and that was under the actual tax, I could see their argument. Not sure how the law sees it.

If they just gave you a bottom line figure with no itemization, it is their problem. You paid what was agreed to.

I would think the dealer is simply collecting the taxes on your behalf, and that the ultimate responsibility to have the proper amount payed is the buyer's responsibility.

Out of curiousity-how much off was it?

Is this sales tax or registration tax?

You could request free dealer-installed options in exchange for paying the correct tax amount.

Although it's a standard part of doing business, it is the customer who is responsible for paying the tax and the merchant is simply passing it along to the state.

It's not like they quoted you a price for the car, drew up a contract listing that price and then at the last minute said they were going to charge you more than what you had agreed to.

The dealer isn't benefiting by the difference in the price you paid and the amount they're trying to collect extra from you. They're still just passing it along to the state.

If it was a grocery store, I would imagine they'd eat the difference, because it would be a small amount. I can see in this case why they would ask you to pay the rest. Yes, it was a mistake, but you really do owe the higher amount.

Next time, you could always come to Oregon while you wait for your car to come in and not have to worry about sales tax at all. :lol:

You'd have to read the contract.

I doubt they have much on you. This sounds sleazy to me. Typical dealer BS....

How much was the difference and how could they possibly charge you at the wrong rate?

I imagine the specifics vary by state, but I'd tend to agree with Sowellman. The tax is ultimately your responsibility.

Collecting tax and giving it to the state is the sellers problem. If they didn't collect the correct tax you should have no legal reason to give them more money. On the other hand this is the place where you are going to get your car serviced so don't burn any bridges in the process.

Bummer, but I think you are going to have to pay it. Taxes are the responsibility of the purchaser. In this case, the seller has been handling this for so long we have forgotten it is a coutesy.
The dealership could eat it. That could be a very expensive public relations move.
I am sorry this happened. Congrats on the car, smile first chance you get!

If you have a problem or think they want to pocket the money take it to your tax office yourself and bypass the dealer.

In VA the car tax is paid to DMV when you title the car in your name. The dealer (in VA) could just not complete the title work for you until you paid the tax to them. If they went ahead and paid the tax and tried to collect after the fact my guess would be that unless a judge thought they were trying to defraud you with "bait and switch" on the low price, the law would side with them.

If you have a contract with the price and tax on it, the contract is to buy the car at a certain price and pay the legal tax rate. You can't have a contract with illegal terms. If the tax rate on the contract is wrong you may have one of three cases. 1. The whole contract is void and you must return the car or come to an agreement. 2. The tax rate was a mistake and you must pay the legal rate, or 3. the tax rate was wrong because they tried to defraud you and they may have to eat it.

In Maryland, it is the retailers responsibility to collect sales tax. If the retailer fails to collect sales tax, it is the retailer's liability to the State, not the buyer's liability.

Although it is true that the dealer pays the tax as a courtesy, if the price you agreed on includes the tax, then, ultimately, the dealer should have to eat the difference (unless, as is the case in some jursidictions, it is illegal to include taxes in the price). On the other hand, the city may not (and probably won't) care. How much is the difference. Is it worth fighting over? Maybe you could work out a compromise with the dealer. Most dealer contracts specify that the price doesn't include taxes and any taxes on the form are estimates/believed to be correct, but may be adjusted.

Thanks for all the help, it seems that everyone's opinion is as divided as mine. The amount in question works out to about $250, significant but not huge. The contract is itemized, with tax as it's own line in the contract. However, the contract also states that we agree to all these terms. I think I'll talk to the dealer today and tell them that I've posted to NAM and that people are awaiting a resolution. I can't really think of any dealer installed options that I want. I'm not into the running lights or the roof rack. I don't want the ipod adapter. I could maybe ask for the extra year of service though...

I don't think that they are doing anything shady. However, I am unimpressed with the sloppiness of the dealership, first to get my order wrong, then to charge me the wrong amount. I am wary of paying money after the fact. What assurance do I have that they did not make other mistakes that they will expect me to rectify in the future?

Anyway, thanks again for all the feedback and I'll keep everyone posted.

A similar thing happened to me, We had an agreed upon price and a signed contract when I ordered..... when the car came in they tried to hit me with a price increase and had even changed the contract to cover the increase their advantage........ Hmmm good thing I brought the original with me.... Anyway, they had to change all the papers to reflect the original price and managed to under charge for taxes.... well I received a bill at the end of the year from the Illinois tax department with PENALTY for not paying in time. The dealer is not responsible for the tax or even to notify you if you have underpaid.

Thanks for posting. Yes, please keep us posted. I too live here in Chicagoland. Hope it will resolved soon.

How about this...have the dealer adjust the price of the car down to make the taxed amount accurate. That way the tax man is happy and you get a rebate from the dealer because you overpaid for the car. :grin:


Okay, okay ... i know. I'm not helping.

The financial person is trying to cover their butt at YOUR expense...literally!

My advice would be to take a copy of the signed contract--& any other paperwork related to the sale--to the DMV and ask to speak to a supervisor.

http://www.revenue.state.il.us/Publi...ales/STS76.PDF

Pg. 34 appears to have the information (ST-556) you seek--a business that sells items that are normally required to be titled or registered in the State of Illinois. Also, there's interesting info about ST-556 on p. 44 that specifically says that businesses receive forms that are pre-printed with the appropriate tax rate(s). There's also a section that states that a business which is required to file ST-556 is the entity responsible for any errors.

(I'm interpreting the pre-printed statement to mean that the reason the tax rates are pre-printed is to AVOID errors...plus, I'm interpreting the "entity responsible for any errors" part to mean that the dealership must pay the difference, not you.)

Here's a toll-free number that might be helpful:

1-800-252-8980

Good luck!

Thank you everybody. The issue is resolved and I'll give you the full rundown.

In summary: The dealer had collected and payed the state tax of 6.5%. They had neither collected nor paid the Chicago city tax of 1.25% nor the Cook county tax of 0.75%. I called both the Chicago and Cook county tax offices and they both told me that a dealer outside of the county and city respectively was under no legal obligation to collect the tax. They advised me to fill out the forms on my own and pay the tax myself if I thought that the dealer was shady. In fact I don't. I think that Knauz mini has treated me very well and been very ethical in their dealings. Peter, the manager, did acknowledge that they had made mistakes and is sending me some winter floormats as a gesture of apology (they had already given me the carpet set for free). I feel a little annoyed that they made these mistakes and I had to deal with them but I appreciate their honesty and upfrontness.

Plus, after work today I'll drive around for a while and forget all about this because my car is ridiculously fun to drive!

Thanks for the help/advice/support everybody.

Glad to hear you got it all worked out. Those pesky county and city taxes in Chicagoland are just too much. I got confused on how I paid a different rate at seemingly every place I visited between the city and Palatine when I was out there last summer.

Glad it all worked out!

Good to hear it was resolved amicably. I'm surprised that they would forget something like city taxes in the sale price, though.

That's the spirit! Just be sure to steer clear of potholes and such! :thumbsup:

According to the info I provided in a link earlier in the thread, standardized taxes & the corresponding rate are pre-printed on the form used by the dealership.

It was clearly an oversight made by someone in the financial dept. and not the customer.

Sure, the customer is getting a second set of floor mats but I think the customer is still getting the short end of the stick.

Customer had to pay an additional $250 in taxes. To make up for the error made by the financial dept. the customer is receiving a set of winter floor mats with a retail value of $???. Does MINI sell $250 winter floor mats?