Only Remedy is Application for Refund Once Tax Remitted to New Jersey

The New Jersey Tax Court recently debated whether a claim made pursuant to the New Jersey Consumer Fraud Act may be maintained against a vendor who is alleged to have collected more sales tax than is required by the Sales and Use Tax Act. Specifically, a class action alleged that the plaintiff made several purchases from the defendants’ supermarkets from 2002 to 2005, and that the defendants overcharged sales tax that was due on the purchases. The overcharges are said to have resulted from the defendants’ computation of sales tax based on the regular price of the items purchased rather than on the reduced or discounted sales prices actually charged for the items, particularly in transactions where the plaintiff used store coupons or used a shopper’s club card issued by the supermarket. The alleged violations were dismissed because, once the money collected was remitted to the state, the sole remedy available to the taxpayers was a refund claim made to the Division of Taxation. (Kawa v. Wakefern Food Corporation, New Jersey Tax Court, No. 008717-2006, April 3, 2008)

Posted on October 8, 2008