Cozen O’Connor: Sales Tax Complaint Remanded [Tax Alert]

Sales Tax Complaint Remanded

Tax Alert

February 12, 2014

A federal district court remanded to state court an action that made various contractual and consumer oriented claims regarding the collection of sales tax. Farneth v. Wal-Mart Stores, Inc., 2:3-cv-01062 (W.D.PA. Dec. 30, 2013). The plaintiff purchased two items of shaving gel at a Wal-Mart store taking advantage of a two-for-one promotional sale. The store charged Pennsylvania Sales Tax as though both items were purchased at full price. The plaintiff brought suit on various tort and trade practice claims. The case was brought as a punitive class action. Wal-Mart removed the case to federal court, which remanded to the state court on the grounds of comity, because the state courts were better equipped to deal with such claims. The court did not rely on the Anti-Tax Injunction Act, evidently because the state was not made a party, at least not up through the time of remand. However the possibility of state involvement directly or indirectly was a factor in the remand. Wal-Mart had asked for advice several years prior regarding two-for-one sales; the parties disagreed on what interpretation should be given to the advice received.


Authors

Joseph C. Bright

Member

jbright@cozen.com

(215) 665-2053

Dan A. Schulder

Member

dschulder@cozen.com

(717) 703-5905

Cheryl A. Upham

Member

cupham@cozen.com

(215) 665-4193

Related Practices


To discuss any questions you may have regarding the opinion discussed in this Alert, or how it may apply to your particular circumstances, please contact: Joseph C. Bright at jbright@cozen.com or 215.665.205, Dan A. Schulder at dschulder@cozen.com or 717.703.5905 or Cheryl A. Upham at cupham@cozen.com or 215.665.4193.