DoorDash Class Action Challenges Sales Tax in Tax-Free States

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A DoorDash class action lawsuit says the food delivery service unlawfully charges sales tax in tax-free states and profits from these charges.

Plaintiffs Ashley Moore and Greg Safian, both of Delaware, say they used DoorDash’s services in the state.

The DoorDash class action claims they were both charged sales tax on their orders, in addition to the service fee, a driver tip, and a delivery charge, on top of the cost of their meal.

Moore and Safian say that Delaware does not collect sales tax, so DoorDash should not have collected sales tax on their orders.

According to the DoorDash class action, DoorDash makes a practice of improperly charging sales tax in states that are tax-free states, including Delaware, Montana, Oregon, and Alaska, or that do not charge sales tax on food not consumed on the premises from which it was purchased, including New Hampshire.

The two consumers say that food ordered from DoorDash is “uniformly” not consumed on the premises from which it was purchased, because the business is a delivery service.

However, Moore and Safian say that despite these factors, DoorDash charges sales tax in Delaware, Montana, and New Hampshire. Allegedly, DoorDash does not charge sales tax in Oregon and Alaska.

The DoorDash class action claims that DoorDash is aware of the tax laws in those states.

Moore and Safian say that in an online forum in which a DoorDash customer complained of being improperly charged sales tax in Montana, the consumer said that a DoorDash representative confirmed the company’s knowledge of the laws in Delaware, Montana, and New Hampshire “that do not allow merchants to collect sales tax charges from customers.”

The DoorDash sales tax class action lawsuit claims that customers are financially injured by DoorDash’s practice because they should not have been forced to pay sales tax on their orders made in tax-free states.

The DoorDash tax class action lawsuit also argues that DoorDash lied to consumers by telling those in tax-free states that they were being charged sales tax, when really, they were being charged a fee that would be kept by DoorDash.

Based on this, the consumers say that DoorDash was unjustly enriched by its practice of wrongly charging sales tax in tax-free states.

Allegedly, the Terms of Use for DoorDash requires consumers to not file lawsuits against the company and instead settle their complaints though arbitration.

However, Moore and Safian claim that the company did not present this information in a clear way, so many customers were not aware of the terms to which they were agreeing.

“Because the [terms of use], and the arbitration and class waiver provisions it contains, are not reasonably conspicuous to consumers, but are linked, in small and inconspicuous typeface, in sections on the webpage or app that users are unlikely to see, DoorDash customers, including plaintiffs, were not on notice of the purported requirement to arbitrate and to waive participation in class actions,” the DoorDash class action states.

Moore and Safian are represented by Kyle J. McGee of Grant & Eisenhofer PA.

The DoorDash Sales Tax Class Action Lawsuit is Ashley Moore, et al. v. DoorDash Inc., Case No. 1:19-cv-00636-UNA, in the U.S. District Court for the District of Delaware.

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