BEFORE THE UTAH STATE TAX COMMISSION
) Appeal No. 00-1115
v. ) Account No. ######
MOTOR VEHICLE ENFORCEMENT ) Tax Type: Advertisement Violations
DIVISION OF THE UTAH STATE )
TAX COMMISSION, ) Presiding: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: PETITIONER
For Respondent: Mr. Gale Francis, Assistant Attorney General
Ms. Julie Thomas, from the Motor Vehicle Enforcement Division
Mr. Tom Bohling, from the Motor Vehicle Enforcement Division
STATEMENT OF THE CASE
This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. '59-1-502.5, on February 5, 2001.
Respondent proposed a penalty upon Petitioner for misleading advertising, and Petitioner has appealed the proposed fine.
In July, 2000, Petitioner published an ad which included the serial number of the vehicle, the amount down, the amount of the first payment, "plus tax, license and fees". The ad also contained a total out-of-pocket cost, the length of the financed contract, and the interest rate as a stated A.P.R., and also said W.A.C., for "with approved credit".
The position of Respondent is that the ad was a violation of Utah Code Ann. '41-3-210 and Utah Administrative Code Rule R877-23V-7 as a misleading advertisement because it did not contain the total sales price, and a person would allegedly not know the total price being paid for the vehicle.
Utah Code Ann. '41-3-210, provides in relevant part, as follows:
(1) The holder of any license issued under this chapter may not:
(a) intentionally publish, display, or circulate any advertising that is misleading or inaccurate in any material fact or that misrepresents any of the products sold, manufactured, remanufactured, handled, or furnished by a licensee.
Utah Administrative Code Rule R877-23V-7, provides in relevant part:
A. Violation of any of the following standards of practice for the advertising and selling of motor vehicles is a violation of Section 41-3-210.
1. Accuracy. Any advertised statements and offers about a vehicle as to year, make, model, type, condition, equipment, price, trade-in-allowance, terms, and so forth, shall be clearly set forth and based upon facts.
* * * *
3. Price. When the price of a vehicle is quoted, the vehicle shall be clearly identified as to make, year, model and if new or used. In addition, the stated price must include all charges that the customer must pay for the vehicle, including freight or destination charges, dealer preparation, dealer handling, additional dealer profit, document fees, and undercoating or rustproofing.
* * * *
7. Finance. The phrases, "no finance charge", "no carrying charge", or similar expressions may not be used when there is a charge for placing the transaction on a time payment basis. Statements representing or implying that no prospective credit purchaser will be rejected because of inability to qualify for credit may not be used.
Paragraph (a)(1) of Rule R877-23V-7 deals with the accuracy in advertising, and the substance of that rule, as it relates to the ad in question says, "any advertised statements . . . about a vehicle . . . price . . . shall be clearly set forth and based upon facts." There is nothing in that statement that requires the full purchase price to be set forth in any advertisement, and there is no allegation that the facts which are set forth are not accurate or based upon facts.
In reviewing Rule R877-23V-7.a.3, the relevant parts of that provision state, "when the price of a vehicle is quoted . . . . the stated price must include all charges that the customer must pay for the vehicle, including freight or destination charges, dealer preparation, dealer handling, additional dealer profit, document fees, and undercoating or rustproofing." There is no allegation that the price which is quoted does not contain all of the necessary inclusions, including freight, dealer prep fees, document fees, or other necessary information. Again, that portion of the rule does not require that the total price of the vehicle be stated in advertising.
In reference to Utah Code Ann. '41-3-210, the statute simply provides that advertising may not be "misleading or inaccurate in any material fact. . . ." The division does argue that the advertisement is misleading because a person cannot tell or discern the total price which they would pay for a particular vehicle, but the Commission finds that the advertisement sufficiently sets forth the down payment, the monthly payment, and interest rate so that the ad is not "misleading or inaccurate in any material fact."
DECISION AND ORDER
Based upon the foregoing, the Commission determines that the ad, Exhibit R-1, does not constitute a violation of either Utah Code Ann. '41-3-210, or of Utah Administrative Rule R877-23V-7. Accordingly, the fines and penalties proposed to be imposed against Petitioner for the alleged violation are not sustained, and are ordered removed from the records of Petitioner.
This decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134
Failure to request a Formal Hearing will preclude any further appeal rights in this matter.
DATED this 8th day of March , 2001.
G. Blaine Davis
Administrative Law Judge
BY ORDER OF THE UTAH STATE TAX COMMISSION.
The Commission has reviewed this case and the undersigned concur in this decision.
DATED this 8th day of March , 2001.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson