Wednesday, July 03, 2002
Auto buyers owed
Buy a used car? Then read this
By Mark R. Chellgren
The Associated Press
FRANKFORT With time running out for applications, the state will take to the air to track down people who might be owed a tax refund on used-vehicle purchases.
In late April, the state sent notices to 831,000 people who might have bought a used car from March 10, 1997, to Jan. 31, 2001, and paid a sales tax that has since been declared unconstitutional.
By this week, about 50,000 people have filed claims for refunds, far fewer than expected by the cabinet and attorneys in the lawsuit that produced the refund.
I can only speculate that people didn't understand or don't realize the refund could be in the hundreds of dollars, said Irv Foley, one of the attorneys involved in the case.
Refund may be due
Kentucky used to allow a credit for the value of a trade-in against the taxable value of a used vehicle. The tax is 6 percent, but the credit was allowed only for vehicles bought in Kentucky.
A judge ruled last year the different treatment for vehicles purchased in Kentucky or another state was unconstitutional.
Since the notices were mailed, attorneys came up with another scenario in which a refund might be due. If someone from Kentucky sold a car to an out-of-state dealer, who then sold it to a Kentuckian, that transaction may also be eligible for a refund. But the Revenue Cabinet's database has not kept track of such transactions.
And the database had other problems. More than 120,000 of the original notices were returned by the post office as undeliverable.
I am convinced there are a lot more people than have filed applications, Mr. Foley said. The Revenue Cabinet has done as well as it could.
Getting the word out
The judge in the case authorized spending $129,000 on radio and other advertising to alert people to the potential refund. Most of the commercials will run in border areas of the state and begin this week, Mr. Foley said.
The court will later decide whether the commercials should be paid for by the cabinet or from the pool of money set aside for refunds.
The cabinet had estimated the refunds could total $12 million, but now believes the figure will be smaller, said spokesman Alex Rose.
People who think they are entitled to a refund must complete a form that is available at all county clerk offices. The form can also be printed from a Web site established for the refund program, www.cartaxrefund.com.
The form must be submitted by July 31.
For information, call toll free: (877) 347-4784.
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