Lawyer Commentary Mondaq United States How Can Retailers Avoid Consumer Class Actions And Government Investigations Over State Sales Tax?

How Can Retailers Avoid Consumer Class Actions And Government Investigations Over State Sales Tax?

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Consumer class actions regarding the over-collection of state sales tax continue to be a thorn in the side of retailers. While the amounts of tax collected may be individually small, claims asserted on behalf of a class can expose large retailers to potentially millions of dollars in liability and, in some cases, investigatory action by state attorneys general under state consumer protection acts.

The types of tax at issue have included sales tax on computer hardware service contracts, see e.g. Feeney v. Dell Inc., 466 Mass. 1001 (2013); Long v. Dell Inc., 93 A.3d 988 (R.I. 2014), pizza delivery charges, Schojan v. Papa John's International Inc., C.A. No. 14-cv-01218 (M.D. Fla.), grocery coupons, Wong v. Whole Foods Market Group Inc., C.A. No. 1:15-cv-00848 (N.D. Ill.), sale items, Bugliaro v. BJ's Wholesale Club, Inc., (Fla. Cir. Ct.), and returned items, Brandewie v. Wal-Mart Stores, Inc., C.A. No...

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