Whole Foods Sued in Sales Tax Class Action Lawsuit

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A sales tax class action lawsuit was filed against Whole Foods Market Group Inc. on Jan. 28, alleging the supermarket chain overcharged sales tax for consumers who used coupons on some grocery store purchases.

The Whole Foods sales tax class action lawsuit was filed in Illinois federal court by plaintiff Chang Wong who claims Whole Foods improperly calculated the sales tax by using the full value of a customer’s purchase even though they used a coupon for which Whole Foods is not reimbursed. The sales tax class action lawsuit claims that according to Illinois administrative code, only the discounted price of an item or purchase is subject to sales tax if the retailer does not receive reimbursement for a coupon.

Wong alleges he purchased items at a Chicago Whole Foods in November of last year. During his transaction, Wong used a $15 coupon that Whole Foods gave to him from a previous purchase that exceeded $50. According to the Whole Foods class action lawsuit, Whole Foods charged Wong $2.07 in sales tax for his purchase when he allegedly should have been charged 68 cents.

The plaintiff has filed this sales tax class action lawsuit on behalf of himself and a Class that would include:

“(a) all individuals who redeemed coupons (b) at a Whole Foods store in Illinois (c) on or after a date three years (Count I) or five years (Counts II-III) prior to the filing of this action and (d) were charged sales tax based on the price prior to the discount resulting from use of the coupon, (e) where the coupon did not require the consumer to bear Whole Foods tax liability.”

The Whole Foods sales tax class action lawsuit is seeking compensatory and punitive damages for himself and other Class Members, which would be equal to at least 1 percent of annual revenue for each Illinois Whole Foods store during the year in which the alleged sales tax violation occurred. According to Wong, each store allegedly brings in over $32 million per year in store revenue.

This is not the first time a major store has been accused of overcharging customers for sales tax on store items. Just a few days prior to the filing of the Whole Foods sales tax class action lawsuit, plaintiffs in a similar lawsuit against Walmart have moved for class certification. The Walmart sales tax class action lawsuit alleges the store makes a practice of applying lower sales tax rates on returned items, amounting to about $9 million for Wal-Mart over the course of four years.

The plaintiff is represented by Cathleen M. Combs, James O. Latturner, Rebecca A. Cohen and Daniel A. Edelman of Edelman Combs Latturner & Goodwin LLC.

The Whole Foods Sales Tax Class Action Lawsuit is Wong v. Whole Foods Market Group Inc., Case No. 1:15-cv-00848, in the U.S. District Court for the Northern District of Illinois.