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Old 12-01-2009, 09:02 AM   #1
XDCX
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Default News report - Manteca Dodge owes $853K in Sales Tax

In the category of you can't always believe what you read, a news report indicates that the former owner of Manteca Dodge owes $853K to the state of California for sales tax.

Here's a link to the news report - click here

While I imagine it's possible, it doesn't seem likely to me that the dealership could have incurred that large of a receivable before the state would have forced them out of business.

Even if you assume an average sales tax amount of $2,000/vehicle, that's over 400 transactions that were never remitted. As I recall, Manteca Dodge was only selling about 20 - 30 new cars per month.

On a different note, I wonder if a dealer can discharge this obligation via bankruptcy? I remember reading that a person can NEVER discharge debt owed to the IRS that was collected for employee withholding. I wonder if debt owed to the state for unpaid sales tax can be discharged or whether it follows a person for life?
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Old 12-01-2009, 12:41 PM   #2
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As to the ability to discharge sales tax in bk, that is a negative...stays til paid.
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Old 12-01-2009, 12:48 PM   #3
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How were they getting the lein slips for finance without paying the tax? Its a great plan!
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Old 12-01-2009, 01:47 PM   #4
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Originally Posted by F&I Pro View Post
As to the ability to discharge sales tax in bk, that is a negative...stays til paid.
Does it stay with the corporation, or do you think the state will hold the Dealer Principal accountable with a personal guarantee?

The dealership has been closed for over a year but the Dealer Principal enjoyed a pretty high-profile lifestyle before the store went under. He created his own Internet-based TV show loosely based off of the King of Cars series. One episode showed him flying his own Cirrus airplane to evaluate some modified SRT vehicles he was going to sell.
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Old 12-01-2009, 01:49 PM   #5
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How were they getting the lein slips for finance without paying the tax? Its a great plan!
That's why I doubt the amount owed could be that high - you'd have to think someone at the state would cut them off if they were not remitting sales tax.

I know that his father-in-law also had a dealership fail - maybe the amount is the total for both stores?
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