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Law360 (November 24, 2020, 4:10 PM EST) -- Several Pennsylvania retailers and big-box stores, including Walmart and Home Depot, wrongly charged sales tax on tax-exempt protective face masks and face coverings, claimed a proposed class action filed in a state court.
Seven Pennsylvania residents 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 Monday with the Allegheny County Court of Common Pleas.
The suit was brought against the retailers Walmart, Home Depot, Dollar General, Giant Eagle, Big Lots, Jo-Ann Stores, Ollie's Bargain Outlet Holdings, Tuesday Morning Corporation and Ulta Beauty by residents Christina Duranko, Gerry McLean, Mary Marous, Joyce Wojton, Beverly Evans, Jennifer Pollock and Martha Bailey.
According to the complaint, the residents were charged sales tax at a rate of 6% or 7% on masks or face coverings purchased at various stores in the state. The state sales tax rate is 6% and a 1% local tax is added for purchases in Allegheny County, according to the Pennsylvania Department of Revenue website.
The claims mirror a separate complaint filed in October by the same attorney, Kevin W. Tucker. That proposed class action also alleges that more than a dozen Pennsylvania retailers including American Eagle Outfitters, Foot Locker, Kohl's, J. Crew, The Gap, Walgreens and Hot Topic should have known that it was "impermissible to charge or collect sales tax on protective face masks."
The latest suit says the October complaint is "substantially similar" to its claims and notes that after it was filed, the department posted on a customer service website that "face masks (cloth and disposable) are exempt from Pennsylvania sales tax." A department spokesperson previously told Law360 that links from the site are official guidance.
Suing under the state's Unfair Trade Practices and Consumer Protection Law, the residents seek 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. The residents are seeking an award equal to $100 per violation and additional relief for the proposed class.
A spokesperson for Ulta Beauty said in an email that the company had not been served and declined to comment on the complaint and its allegations.
David Campbell Jr., litigation director for Big Lots, told Law360 that it is company practice not to comment on pending litigation.
Spokespeople for the other retailers and counsel for the residents were not available or did not immediately respond to requests for comment on Tuesday.
Christina Duranko, Gerry McLean, Mary Marous, Joyce Wojton, Beverly Evans, Jennifer Pollock and Martha Bailey are represented by Kevin W. Tucker of East End Trial Group LLC.
Counsel information for the retailers was not immediately available.
The case is Christina Duranko et al. v. Big Lots Inc. et al., in the Court of Common Pleas of Allegheny County, Pennsylvania. The case number is not available.
--Editing by Vincent Sherry.
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