Overstock.com Taxes on Sales Delivered to Missouri Customers Class Action

This class action concerns the amount of tax charged to Missouri customers by Overstock.com, Inc. on a purchase made by remote means, where the items purchased are shipped from outside Missouri to an address within Missouri. The complaint alleges that the company charges higher sales tax rates than those set forth by Missouri itself, which begin at around 4.225%.

The class for this action is all persons and entities who, between May 22, 2015 and May 22, 2020, bought a product from Overstock.com through a remote sales channel, including its internet website, that was delivered from out of state to a Missouri delivery address, and who were charged a higher tax rate on the purchase than the lower use tax rate.

Overstock.com is an online retail business that sells good such as clothing, jewelry, bedding, and furniture through orders placed on its website. Some of the items are “close-outs” from failed companies; other items are new.

The complaint says, “Missouri state law mandates that retailers with tax nexus charge a use tax on sales of their products through remote means, including an internet website, telephone, catalog or other remote communications systems … to Missouri purchasers that are shipped from an out-of-state facility.”

Two laws are involved here: a Sale Tax Law and a Compensating Use Tax Law.

The state use (sale) tax for such sales is 4.225%, although some additional local use taxes may be charged. These taxes are levied on sellers “for the privilege of engaging in the business of selling personal property … at retail in this state.”

The state does have an “in commerce exemption” to this tax, the complaint explains, “for any interstate, in-bound retail sales made between a seller from a non-Missouri location and a Missouri purchaser where the seller delivers the purchased tangible personal property from outside the state of Missouri to the purchaser’s delivery address in Missouri.” However, in such cases, there is a compensating use tax law, also called a “vendor’s use tax.” This is the 4.225% state use tax plus any local use tax in effect at the delivery address.

The plaintiff in this case, Kathryn Schott, bought a pair of Mules Faux Leather Slides from Overstock on February 17, 2020. They were shipped from Cedar Rapids, Iowa to Schott’s address in Fenton Missouri. Overstock charged Schott an 8.250% tax on this purchase.

The complaint alleges violation of the Missouri Merchandising Practices Act, negligence, unjust enrichment, and money had and received.

Article Type: Lawsuit
Topic: Taxes

Most Recent Case Event

Overstock.com Taxes on Sales Delivered to Missouri Customers Complaint

May 22, 2020

This class action concerns the amount of tax charged to Missouri customers by Overstock.com, Inc. on a purchase made by remote means, where the items purchased are shipped from outside Missouri to an address within Missouri. The complaint alleges that the company charges higher sales tax rates than those set forth by Missouri itself, which begin at around 4.225%.

Overstock.com Taxes on Sales Delivered to Missouri Customers Complaint

Case Event History

Overstock.com Taxes on Sales Delivered to Missouri Customers Complaint

May 22, 2020

This class action concerns the amount of tax charged to Missouri customers by Overstock.com, Inc. on a purchase made by remote means, where the items purchased are shipped from outside Missouri to an address within Missouri. The complaint alleges that the company charges higher sales tax rates than those set forth by Missouri itself, which begin at around 4.225%.

Overstock.com Taxes on Sales Delivered to Missouri Customers Complaint
Tags: Improper Sales Tax Charges, Tax, Tax Overcharges