By Abraham Gross

Law360 (October 23, 2020, 5:28 PM EDT) -- Several Pennsylvania retailers including American Eagle Outfitters, Foot Locker, Kohl's, J. Crew, The Gap, Walgreens and Hot Topic wrongly charged sales tax on tax-exempt protective face masks and face coverings, claimed a proposed class action filed in a state court.

Pennsylvania resident Daniel Garcia said that numerous retailers wrongly charged or collected the tax on the sales of masks even though those items were exempt under Democratic Gov. Tom Wolf's emergency disaster declaration for the COVID-19 pandemic, according to a complaint filed Thursday with the Allegheny County Court of Common Pleas.

The suit was brought against retailers American Eagle Outfitters, Foot Locker, Kohl's, J. Crew, The Gap, Hot Topic, Carter's, Chico's, Express, Francesca's, Gabriel Brothers, Genesco Inc., Tapestry Inc., Vera Bradley Inc. and Walgreens, in addition to the stores they operate under different brand names, such as Old Navy and Kate Spade.

According to the complaint, Garcia resides in Allegheny County and was charged sales tax on masks purchased between Sept. 26 and Oct. 22 at various stores located in the state at a rate of 7%. The state sales tax rate is 6% and a 1% local tax is added for purchases in the county, according to the state Department of Revenue website.

The store owners, Garcia said, should have known that it was "impermissible to charge or collect sales tax on protective face masks based on widely disseminated messages regarding the tax exemption for protective face masks during the state of emergency in Pennsylvania."

As evidence of this, the complaint cites one local news story from Massachusetts, two blog posts and a comment from a seller on the e-commerce website Etsy.

Suing under the state's Unfair Trade Practices and Consumer Protection Law , Garcia seeks to represent a class of Pennsylvania customers who purchased face masks or coverings at retail stores or online from the retailers and were charged amounts "purporting to represent sales tax" since March 6. Garcia is seeking an award equal to $100 per violation and additional relief for the class.

Kevin W. Tucker, counsel for Garcia, told Law360 that masks, including nonmedical grade cloth masks sold at retail, qualified as exempt medical supplies because they are personal protective equipment that government officials are requiring during the pandemic.

"We think it's pretty obvious that a face mask is PPE," Tucker said.

When asked what government document he was using as evidence that nonmedical grade cloth masks sold at retail are exempt from tax or qualify as an exempt medical supply, Tucker cited an answer on a customer service website operated by the Pennsylvania Department of Revenue.

The answer from April 23, which is indirectly cited in the suit, states that masks sold at retail are exempt for the duration of the emergency disaster declaration for COVID-19 issued March 6. An emergency disaster proclamation from March 6 does not mention masks, face coverings, personal protective equipment, taxes or exemptions.

A department spokesperson told Law360 that links from the site are official guidance and cited a department regulation about the medical supply exemption. The regulation also does not list face masks and states that, "The sale at retail or use of medical equipment remains subject to tax, unless the equipment qualifies as an exempt therapeutic or prosthetic device."

Representatives for Tapestry and J. Crew declined to comment. Representatives for the other retailers were not immediately available for comment Friday or did not respond to requests for comment.

Daniel Garcia is represented by Kevin W. Tucker of East End Trial Group LLC.

Counsel information for the retailers was not immediately available.

The case is Daniel Garcia v. American Eagle Outfitters Inc. et al., in the Court of Common Pleas of Allegheny County, Pennsylvania. The case number is not available.

--Editing by Neil Cohen.

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