Auto Dealer Fights Back After Connecticut Tax Deposition Missteps

In the Law360 article “Auto Co. Accuses Conn. Revenue Dept. Of Fumbling Depos” by Aaron Keller, attorney Matthew Gibbons of Holon Law Partners LLP represents A Better Way Wholesale Autos Inc. in a closely watched case against the Connecticut Department of Revenue Services (DRS).

The auto wholesaler accuses DRS of imposing an unconstitutional double tax on vehicle warranties sold to out-of-state buyers, resulting in a $477,000 assessment on $4.2 million in sales. The dispute escalated when the company sought sanctions after two DRS witnesses appeared unprepared for their September depositions—admitting they hadn’t reviewed the deposition notice or key topics they were assigned to address.

According to the sanctions motion, this lack of preparation “frustrated the purpose” of discovery and wasted significant time and resources. Gibbons and his co-counsel argue that DRS’s conduct violated discovery rules and impeded the fair progress of the case.

The lawsuit, filed in July 2024, centers on whether Connecticut’s tax assessment violates constitutional protections against double taxation. The case is currently set for a three-day trial in mid-December, with implications for how states tax warranties and service contracts linked to interstate auto sales.