Tesla loses at Utah Supreme Court, can't sell directly in state

Utah Supreme Court rules against Tesla in push to sell cars (Photo: KUTV)

(KUTV) A major blow, Monday, dealt by the Utah Supreme Court against Tesla Inc. and Utahns who like Tesla cars. The Utah court ruled in favor of the Utah State Tax Commission which deemed that Utah law prohibits Tesla from selling it's electric cars directly to consumers from a Utah-based dealership.

It's a law Troy Larkin says, "sucks."

Larkin owns a Tesla and loves it. But as resident of South Ogden, getting it was not particularly easy. He had to travel to Las Vegas to test drive one. Then he returned to Utah where he was able to order his car online to ultimately have it delivered to Murray where he was able to pick it up.

"Buying it sight unseen was nerve-racking," he said.

It is a similar story for every other Tesla you see on Utah roads. Despite having a car dealership in the state, Tesla has been forbidden from selling cars at the location. Utah state law says Tesla is not allowed to sell directly to customers. Car makers must offer their vehicles for sale through franchises.

Tesla Inc. tried to get around the law by forming a company called "Tesla UT," but the company was still not given a license to operate a car dealership by the Utah State Tax Commission.

Tesla argued the law is unconstitutional and also that not-allowing Tesla to open its own franchise was against Utah statute. Monday afternoon, and a 5 to 0 decision, the court sided with the Tax Commission.

"We affirm the tax commission's decision affirming the denial of Tesla Utah's application for a new motor vehicle license," Associate Chief Justice Lee wrote in a 20 page opinion.

Tax Commission spokesperson Charlie Roberts said the agency is "satisfied" with the ruling, adding that for consumers in Utah it is, "business as usual. Nothing changes."

Representatives at the Tesla dealership in Utah declined to comment. Tesla's corporate public relations department did not immediately respond to comment for this story.

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