Auto Plaza USA in Nicholasville will pay more than $600,000 in taxes, penalties and fees that were inaccurately billed to customers, according to an agreement announced Friday by the Kentucky Motor Vehicle Commission.
The consent decree agreement adopted by the commission resolves claims made by customers of the car dealership, the commission said in a release. There was no immediate comment from the dealership.
In May the commission began an investigation into claims made against Auto Plaza USA and determined that the dealership had made inaccurate payments of the motor vehicle usage tax that is assessed when a vehicle is sold or transferred.
More than 1,400 examples of inaccurate payments were identified, leaving those Auto Plaza customers with tax bills from the Kentucky Department of Revenue that the customers believed had been fully paid at the time of their vehicle purchase.
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The commission voted unanimously to enter into a binding agreement with Auto Plaza USA. In addition to the taxes, penalties and fees, the dealership must pay a $4,000 fine.
The dealership agreed to the terms of the consent decree on July 28 and issued a check to pay the fine in full on that day.
“Most importantly, this agreement makes Auto Plaza customers whole relative to the taxes owed to the Department of Revenue, and it does so as quickly as we possibly can,” said John-Mark Hack, commissioner of the Department of Vehicle Regulation in the Kentucky Transportation Cabinet and a commission member.
“The agreement also holds Auto Plaza rightfully accountable for their actions, while allowing it to stay in business so that it can meet its financial obligations,” Hack said in the release. “They will be operating under a regulatory microscope moving forward, and the Motor Vehicle Commission reserves the right to revoke their dealer’s license if they fail to honor any part of the agreement.”
Earlier this month the Kentucky Attorney General’s Office filed suit against Auto Plaza USA that alleged the dealership engaged in deceptive practices by defrauding more than 1,400 customers.
The suit alleged that between 2012 and 2016 Auto Plaza collected vehicle usage taxes from customers and then falsified documents to avoid making the correct payment to the Kentucky Department of Revenue.
Customers later received delinquent tax notices from the department and were left owing a tax bill that in many cases they had already paid to Auto Plaza.
Auto Plaza USA customers who believe they were subjected to the inaccurate tax payments are encouraged to visit the Motor Vehicle Commission website at www.mvc.ky.gov. Customers should download the Motor Vehicle Commission complaint form and return it, along with any notices from the Kentucky Department of Revenue showing taxes, penalties and interest due, to the commission.
Among its duties, the Kentucky Motor Vehicle Commission is responsible for providing consumer protection by investigating complaints against dealerships in regards to purchasing a vehicle and dealer failing to transfer to the customer.