Appeals court cuts Chrysler Financial sales tax refund

Chrysler Financial took a potentially multi-million-dollar hit when the Michigan Court of Appeals cut a $3.8 million state sales tax refund.

A lower court had ordered the refund based on Chrysler Financial’s claim that 24,423 loans, dating back to the late 1990s, went into default and the company either was due a refund of the sales taxes paid or should receive a deduction on its federal taxes. The court upheld Chrysler Financial’s claim and awarded the company a $3.8 million refund.

The Michigan Department of the Treasury appealed the decision, saying the lower court’s award didn’t exclude vehicles that had been repossessed and resold. The DoT estimated as many as two-thirds of the total that Chrysler Financial had claimed fell into this category. The three-judge appeals court panel agreed and ordered the lower court to recalculate the refund.

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