The Washington Superior Court, King County, has dismissed a class action suit brought against multiple grocery chains. The claim alleged that the grocery stores in question improperly collected tax on transactions that should have qualified as exempt sales of food and food ingredients. Despite multiple motions to dismiss the case on the grounds that the taxpayer should have pursued a refund request with the Washington Department of Revenue, the plaintiff contended that his challenge was not simply a refund of overpaid tax, but was based on the legality of the businesses collecting an invalid tax. The Superior Court agreed with an earlier appeals court, stating that under Washington law, the remedy for tax over collected from customers, whether the overcollection was due to an unlawful tax or a computational or factual error on the part of the seller, remains to file a refund request with the Department of Revenue. The case was dismissed without prejudice, allowing the plaintiffs to pursue the refund request again through the correct channels.
When requesting a refund of tax paid to a seller on a sale, each state has their own written rules and laws concerning the process for receiving the refund. Some require the buyer to request the refund from the seller first, and some require the seller to provide the buyer with a form certifying that the tax collected was paid to the state and that the seller will not also seek the refund. When a seller refuses a refund, there are also options for the buyer to pursue the refund without the seller’s cooperation. If you believe you have been overcharged tax by a seller, make sure you understand what your state requires you to provide, to whom, and within what time frame.
(Caneer v. The Kroger Co.; No. 22-2-08219-4 KNT)