The Car and Truck Fleet and Leasing Management Magazine

Alabama Supreme Court Sides with GMAC in Suit to Impose Retroactive Sales Tax Liability

July 13, 2004

On June 25, the Alabama Supreme Court dismissed the class action suit against GMAC brought by the City of Red Bay on behalf of some 314 cities and counties in Alabama, which were seeking to impose retroactive city/county sales tax liability on GMAC. The underlying state tax issue, which was brought to the attention of the industry by the State Tax Committee of the American Automotive Leasing Association (AALA), was whether a state statute preempted the cities and counties from imposing any local sales tax (where there was no separately-stated local rental tax) on vehicles that GMAC purchased for the purpose of leasing, in GMAC's Smart Lease program, where these vehicles were already subject to a statewide State rental tax. The only issue before the Alabama Supreme Court was whether the suit was improperly certified as a class action. Together with the Alliance of Automobile Manufacturers and others, AALA submitted an amicus brief supporting GMAC and arguing that the suit was not properly a class action. The Alabama Supreme Court held that a class action was improper, because the local taxing jurisdictions failed to comply with the Alabama Taxpayers Bill of Rights (TBOR). The statutory provisions of the TBOR required them to provide GMAC with a specific-dollar-amount preliminary assessment and administrative procedures to contest the assessment. But the suit that was filed was a sweeping theoretical suit, by cities and counties that had not concretely assessed what specific dollar amount (if any) they were claiming from GMAC. The Court ruled that this was impermissible under the TBOR, and it ordered the suit dismissed.
Twitter Facebook Google+


Please note that comments may be moderated. 
Leave this field empty:

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.

Sponsored by

Biogas is a a gas created from the breakdown of organic matter such as vegetable or animal waste.

Read more

Up Next

More From The World's Largest Fleet Publisher