HVT, INC. v. Law
16 A.3d 686
| Conn. | 2011Background
- HVT, Inc. is trustee of the Honda Lease Trust; American Honda Finance serves as servicer.
- Connecticut dealerships entered into 10,000–15,000 leases with lessees and procured titles/registrations in the plaintiff’s name or the trust.
- Lessee renewal applications and renewal fees are sent to the department by the lessees on behalf of the trust.
- The department issues registrations; the trust then forwards registration cards to lessees.
- Renewal fees were assessed as taxable gross receipts for the audit period (April 1, 2001–October 31, 2004) after the Department deemed renewal fees part of the plaintiff’s gross receipts.
- The court held that renewal fees paid by lessees to the DMV constitute gross receipts under § 12-407(a)(9)(A) and are taxable under § 12-408(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether renewal fees paid by lessees directly to the DMV are the plaintiff’s gross receipts. | HVT argues renewal fees are incidental expenses, not gross receipts. | Law contends renewal fees are part of gross receipts because lessees pay for which the plaintiff has statutory responsibility. | Yes, renewal fees are plaintiff’s gross receipts. |
Key Cases Cited
- AirKaman, Inc. v. Groppo, 221 Conn. 751 (1992) (whether reimbursements constitute consideration for services)
- Geckle v. Dubno, 2 Conn.App. 303 (1984) (reimbursement of taxes previously paid by lessor; later exemption statute applied)
- Key Air, Inc. v. Commissioner of Revenue Services, 294 Conn. 225 (2009) (strict construction against tax authorities; define gross receipts)
- Jones v. Crystal, 47 Conn.App. 694 (1998) (sales tax on tangible personal property unless exempted)
- Director of Health Affairs Policy Planning v. Freedom of Information Commission, 293 Conn. 164 (2009) (legislative policy considerations in statutory interpretation)