2001 - 2002 LEGISLATURE
January 31, 2002 - Introduced by Representatives Ladwig, Schneider, Stone,
Albers, Bies, Freese, Gronemus, Gunderson, Hundertmark, Johnsrud,
Krawczyk, Musser, Nass, Ott, Owens, Petrowski, Pettis, Powers, Skindrud,
Sykora and Turner, cosponsored by Senator Plache. Referred to Committee
on Rules.
AB769,1,3
1An Act to create 77.51 (4) (b) 3m., 77.51 (15) (b) 4m. and 218.0171 (2) (cq) of the
2statutes;
relating to: sales tax on motor vehicles purchased after a consumer
3receives a refund under a new motor vehicle warranty.
Analysis by the Legislative Reference Bureau
Currently, the law governing repair, replacement, and refund under a new
motor vehicle warranty, commonly called the "lemon law," provides remedies for a
person who purchases or leases a motor vehicle, or who otherwise may enforce a
motor vehicle warranty (a consumer). Under the lemon law, if a motor vehicle cannot
be repaired, the manufacturer must either replace the vehicle or give the consumer,
and any holder of a perfected security interest in the consumer's vehicle, a full
refund. A full refund includes, in addition to the purchase price and other charges,
any sales taxes paid by the consumer at the point of sale. The sales tax is calculated
at 5% of the difference between the purchase price of the vehicle and any vehicle the
consumer traded in when he or she purchased the vehicle.
Under current law, if a consumer receives a refund under the lemon law and
subsequently purchases a motor vehicle to replace the vehicle for which he or she
received a refund, the person pays a sales tax based on the full purchase price of the
replacement vehicle.
This bill requires a manufacturer, upon payment of a refund under the lemon
law, to provide a written statement to the consumer that includes the trade-in-value
of the vehicle for which the consumer received a refund and the date on which the
manufacturer issued the lemon law refund. Under the bill, a consumer who makes
a subsequent purchase of a motor vehicle and presents the written statement to a
motor vehicle dealer within 60 days of the date on which the manufacturer issued
the refund pays sales tax only on that part of the purchase price that is the difference
between the trade-in value of the original vehicle and the replacement vehicle.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB769, s. 1
1Section
1. 77.51 (4) (b) 3m. of the statutes is created to read:
AB769,2,82
77.51
(4) (b) 3m. If a person who purchases a motor vehicle presents a
3statement issued under s. 218.0171 (2) (cq) to the seller at the time of purchase, and
4the person presents the statement within 60 days from the date of receiving a refund
5under s. 218.0171 (2) (b) 2. b., the trade-in amount specified in the statement issued
6under s. 218.0171 (2) (cq), but not to exceed the gross receipts from the sale of the
7motor vehicle. This subdivision applies only to the first motor vehicle purchased by
8a person after receiving a refund under s. 218.0171 (2) (b) 2. b.
AB769, s. 2
9Section
2. 77.51 (15) (b) 4m. of the statutes is created to read:
AB769,2,1610
77.51
(15) (b) 4m. If a person who purchases a motor vehicle presents a
11statement issued under s. 218.0171 (2) (cq) to the seller at the time of purchase, and
12the person presents the statement within 60 days from the date of receiving a refund
13under s. 218.0171 (2) (b) 2. b., the trade-in amount specified in the statement issued
14under s. 218.0171 (2) (cq), but not to exceed the sales price of the motor vehicle. This
15subdivision applies only to the first motor vehicle purchased by a person after
16receiving a refund under s. 218.0171 (2) (b) 2. b.
AB769, s. 3
17Section
3. 218.0171 (2) (cq) of the statutes is created to read:
AB769,3,318
218.0171
(2) (cq) Upon payment of a refund to a consumer under par. (b) 2. b.,
19the manufacturer shall provide to the consumer a written statement that specifies
1the trade-in amount previously applied under s. 77.51 (4) (b) 3. or 3m. or (15) (b) 4.
2or 4m. toward the sales price of the motor vehicle having the nonconformity and the
3date on which the manufacturer provided the refund.
AB769,3,65
(1) The treatment of section 218.0171 (2) (cq) of the statutes first applies to
6refunds that are made on the effective date of this subsection.
AB769,3,98
(1)
This act takes effect on the first day of the 2nd month beginning after
9publication.
