Colorado Lawmaker Looks Into Dealer Rebates
DENVER (CBS4) – If you buy a “green car” you’re supposed to get a tax credit, but 4 On Your Side was first to report that that’s not always the case.
When Paul Beck went to buy a new car, he fell in love with the Toyota Prius. His only dilemma was whether he should buy it or lease it. He knew that with a hybrid vehicle there was a state tax credit. He asked his sales guy at Boulder Toyota about it.
“He said that with Toyota it was easy because the tax credit goes where the car goes,” Beck told 4 On Your Side Consumer Investigator Jodi Brooks in November 2011.
Beck decided to lease. He filed out his 2010 tax return and got a $2300 tax rebate. Then, last year, the state asked for the money back.
“I got a letter from the State of Colorado Department of Revenue stating that my tax credit had been declined because it was already being claimed,” Beck explained.
The tax rebate was being claimed by Toyota Financial Services, the legal owner of the leased car. That has at least one Colorado lawmaker asking questions.
“What was the legislative intent? Did we contemplate that there would be dealerships and manufacturers who would be the ones actually eligible for this tax credit. I just can’t imagine that,” said Rep. Dan Pabon.
At a House Finance Committee hearing, the Democratic Denver representative asked the Department of Revenue for insight into this issue.
“This is a recent phenomenon; the tax credit has been in effect for a few years. We only saw this recently,” said John Vecchiarelli, Senior Director of Taxation of the Department of Revenue.
4 On Your Side Consumer Investigator Jodi Brooks found out that in 2001, the state paid out more than $5 million in alternative fuel tax credits. There were nearly 2,000 total filings. The average payout was about $2,500. Tax laws prohibit disclosing who is claiming the credit.
Pabon is contemplating new legislation, but first he says he wants to do what’s right.
“I think we need to make those consumers whole. It’s a fairness issue. They purchased these vehicles with the idea they’d get a tax credit and they should get that tax credit,” Pabon said.
The key for any “green car” buyer is to ask a lot of questions. Some lease companies do pass this tax credit on to the customer.
Whatever you’re promised, make sure you get it in writing so you can make prove that’s it’s money you should get to keep.
– Written for the Web by CBS4 Special Projects Producer Libby Smith