Complaint Review: Car Sales Businesses in Arizona

Ever make a large purchase in Arizona, like a car or an entertainment center? Were you charged SALES tax? This is not only a lie, but a dirty little secret Arizona businesses DON'T want you to know...

There is no SALES tax in Arizona! [as per ARS Title 42 Chapter 5]

What they do have is a TRANSACTION PRIVILEGE TAX!
What's the difference? a TRANSACTION PRIVILEGE TAX is a tax on business, a SALES tax is a tax on the consumer. The fact that businesses are allowed to deliberately deceive consumers in this matter is despicable. It is an especially acute problem with the those who prey on those consumers who make the second biggest purchase in their life, a car.
(Parenthetically, businesses are allowed, but are not forced, to pass on this tax. The point here is that car dealers tell customers there is no option, removing it from negotiation when it clearly is negotiable.)

Car dealers routinely deceive consumers in Arizona about this matter. We have specifically discussed this issue during our undercover investigations at several locations, including Camelback Toyota, ABC Nissan, Lou Grubb, Brown & Brown, ...just to name a few.

In every single case, every car salesman contacted argued when they were confronted about the deception. This report makes the findings of that investigation public. Consumers should demand that there be stiff penalties for those businesses which breach the public trust.

According to ARS 42-5061 and our discussions with the Education Outreach of the Department of Taxation, businesses are not required to charge consumers tax on their purchases. They are, however, required to pay tax on their sales and allowed, not forced to pass that tax on to their customers.

The subtle difference is that if the consumer knows that there IS an option, it suddenly becomes a bargaining chip. The salesman can lie and say that the government forces them to charge the consumer and they would really like to drop the fee.

We will be going back to the businesses we previously visited and get their comment on this scam. Stay tuned for the results!

Frank Torelli
Investigative Reporter
Assistant Editor
badbusinessbureau.com

Rip-off Report
Amhearst, Massachusetts
U.S.A.

***NOTE: Although this report deals with Arizona, initial inquiries with the Department of Taxation indicate that there are other states which have similar situations.