Overpaying Cash for Clunkers sales tax

Mystic (WTNH) - The Cash for Clunkers program struck a chord with millions of Americans who were looking a grab a great deal. But some may have paid too much in taxes.

Susan Ponder said she overpaid sales tax on her new Chevy Aveo; a car she bought through the program.

"I was very frustrated by it," she said.

Frustrated because Ponder said she didn't get any help from Valenti Chevrolet in Mystic after she found out she was only supposed to pay tax on the price of the car minus the $4,500 she got for her clunker.

"My constituent was clearly overcharged in her sales tax," said State Rep. Melissa Olson of Norwich.

Rep. Olson contacted the Department of Revenue Services who contacted Valenti; the next day Ponder had a check for $270.

"When the program first came out it was unclear from the state whether we should treat it as a sales tax credit on a trade in or if it was just a voucher from the government," said Rob Valenti of Valenti Chevrolet.

Valenti later learned to treat it as a trade in so the value of the clunker was supposed to be subtracted before tax was determined. He says anyone else overcharged was refunded.

Dealerships don't make any money on this mistake; that money simply went to the state as sales tax. But it could cost consumers more and the state said they're the ones who are going to have to make sure they only paid what they were supposed to.

"How many other people got charged this tax when they shouldn't have?" asked Ponder.

Ponder is Counting on 8 because, she said, "it does get results. I've seen you do it quite often; I just want people to know that if they paid tax on that $4,500 they should get reimbursed for that tax money."

And, at six percent, it certainly does add up.

"[And] $270 is a lot of money; we're retired, we're on social security," Ponder said.

She's hoping others will check their receipts.

Meanwhile, the state says if you believe you overpaid sales tax on your cash for clunkers purchase, contact the dealer for a refund.

The state is not going to track this so it will be up to you to find out for yourself.