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Forever 21 New York State Unlawful Sale Tax on Clothing and Footwear Class Action

The complaint for this class action alleges that retailer Forever 21 charged customers sales taxes on clothing that should have been exempt from it based on the purchaser’s send-to address.

The class for this action includes all persons who were or will be charged retail sales tax on clothing or footwear purchases from Forever 21 for items less than $110, where the purchases are delivered to New York State tax jurisdictions that do not assess sales tax on this clothing.

Tax laws differ from state to state and even in different areas of the same state. For example, in New York City, clothing or footwear that sell for less than $110 per item or pair are exempt from the 4% sales tax as well as from New York City’s 4.5% sales tax and the 3/8% Metropolitan Commuter Transportation District tax. Also exempting these items from sales taxes are the New York State counties of Chautauqua, Chenango, Columbia, Delaware, Greene, Hamilton, Tioga, and Wayne. When a customer and seller are in different states, and the seller ships the purchases to the customer, the tax law that governs the sale is the customer’s location.

However, according to the complaint, Forever 21 has been charging customers sales tax of up to 8.875% for items of under $110 that are delivered to these non-tax areas, and is thus overcharging customers in non-tax areas. The complaint suggests that Forever 21 does not remit these collected taxes to the governing tax authority.

Plaintiff Laura Togut claims that she bought about twenty items of clothing from Forever 21’s website, with each item priced below $110,  for a total of $283.40. The items were delivered to her New York City address, the complaint says, so the sale should have been exempt from sales tax, but Forever 21 charged an extra $22.90 for sales tax, bringing Togut’s order to $306.30. The complaint charges that Forever 21 was not authorized to collect sales tax on the purchase and suggests that the company either simply kept the collected tax or remitted it to tax authorities outside of New York City who were not entitled to it.

The complaint thus alleges violations of the law including unjust enrichment, conversion, and money had and received, and it requests a refund of the money plus damages, interest, and attorneys’ fees and costs.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Forever 21 New York State Unlawful Sale Tax on Clothing and Footwear Complaint

July 24, 2017

The complaint for this class action alleges that retailer Forever 21 charged customers sales taxes on clothing that should have been exempt from it based on the purchaser’s send-to address. Plaintiff Laura Togut claims that she bought about twenty items of clothing from Forever 21’s website, with each item priced below $110,  for a total of $283.40. The items were delivered to her New York City address, the complaint says, so the sale should have been exempt from sales tax, but Forever 21 charged an extra $22.90 for sales tax, bringing Togut’s order to $306.30.

forever_21_new_york_sales_tax.pdf

Case Event History

Forever 21 New York State Unlawful Sale Tax on Clothing and Footwear Complaint

July 24, 2017

The complaint for this class action alleges that retailer Forever 21 charged customers sales taxes on clothing that should have been exempt from it based on the purchaser’s send-to address. Plaintiff Laura Togut claims that she bought about twenty items of clothing from Forever 21’s website, with each item priced below $110,  for a total of $283.40. The items were delivered to her New York City address, the complaint says, so the sale should have been exempt from sales tax, but Forever 21 charged an extra $22.90 for sales tax, bringing Togut’s order to $306.30.

forever_21_new_york_sales_tax.pdf
Tags: Improper Sales Tax Charges, Tax