Dollar General, Aldi Can Charge Sales Tax on Face Masks, Judge Rules

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Dollar General and Aldi can keep charging sales tax on face masks in Pennsylvania, despite a legal challenge from consumers, a judge has ruled.

On Friday, a Pennsylvania federal judge threw out a class action lawsuit that alleged the retailers violated state law by charging sales tax on what consumers say are tax-exempt protective face coverings, Law360 reported.

Plaintiff Joshua James filed the class action lawsuit in November last year, alleging retailers in Pennsylvania can’t collect sales tax on items like protective face coverings because, he argued, they are legally nontaxable medical supplies. 

He sued under the Unfair Trade Practices and Consumer Protection Law and the Pennsylvania Fair Credit Extension Uniformity Act.

The retailers had argued that collecting the sales tax was required by state law, and not motivated by their own greed, Law360 reported. They said collecting sales tax on face masks was not considered trade or commerce under the law. 

On Friday, U.S. District Judge Marilyn J. Horan sided with Aldi and Dollar General to dismiss the case.

In her opinion she wrote that charging sales tax on face masks was not considered “deceptive” under state law.

While James had argued the retailers were benefiting from the sales tax on the masks, the judge did not agree, Law360 reported. 

She ruled that the sales tax collection was not covered under the Unfair Trade Practices law, and James had no real claim for damages.

“The collected sales tax from the two defendants totaled $0.45 and $0.36,” Horan wrote.

“To suggest that defendants sought to retain those amounts of money or benefited from those amounts defies logic.”

She added that the Pennsylvania tax collection scheme designates for retailers to collect the tax as an agent of the Department of Revenue. 

“It remains highly implausible that defendants would have kept $0.45 and $0.36 per face mask for their own use when they were required to remit that money to the state,” she said.

This is not the first class action lawsuit over sales tax on face masks in Pennsylvania. In December last year, several retailers, including Walmart, Home Depot, Big Lots and Dollar General, were hit with a class action lawsuit challenging sales tax charged on face mask purchases during the coronavirus pandemic.

According to several plaintiffs, Big Lots, Dollar General, Giant Eagle, Jo-Ann’s, Ollie’s Bargain Outlet, Home Depot, Tuesday Morning, Ulta Beauty and Walmart all charge illegal sales tax of 6 to 7 percent on purchases of face masks. The plaintiffs contend this sales tax violates Pennsylvania COVID-19 regulations.

Have you paid what you felt was excessive sales tax on a face mask? Let us know in the comments! 

James is represented by Joshua P. Ward of J.P. Ward & Associates LLC.

The Dollar General Aldi Face Mask Sales Tax Class Action Lawsuit is Joshua James v. Aldi Inc. et al., Case No. 2:21-cv-00209, in the U.S. District Court for the Western District of Pennsylvania.

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