PetSmart Class Action Challenges Prescription Animal Food Sales Tax

PetSmart is facing a class action lawsuit that alleges the pet supply chain unlawfully charges consumers sales tax for prescription animal food.

Plaintiff Scott Leeds claims that under Florida law, prescription animal food is exempt from sales tax.

Specifically, the law in question in this case is the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) which “specifically exempts from taxation sales of therapeutic veterinary diets specifically formulated to aid in the management of illness and disease of a diagnosed health disorder in an animal and which are only available from a licensed veterinarian.”

Leeds, on behalf of himself and other similarly situated, initiated the lawsuit after obtaining a prescription for one can of Hill Prescription Diet dog food from his pet’s licensed veterinarian at a Florida PetSmart Banfield Clinic on July 13, 2016.

According to his receipt, the purchase price for one can of Hill Prescription Diet dog food was $2.59 and Leeds was charged $0.19 sales tax for the prescription purchase, making his total purchase $2.78. Although the receipt indicates the non-taxable amount was $0, the entire $2.59 purchase price was exempt from tax under FDUTPA.

Then in September 2016, Leeds purchased a 27.5-pound bag of Hill Prescription Diet dog food from a different PetSmart location in Florida. The purchase price for this bag was $71.21 after deducting a $5 off coupon.

This time, Leeds’ receipt allegedly showed he was charged $4.27 in taxes at a 6.000 percent rate, making his total purchase $75.48. Similarly, his receipt indicated the non-taxable amount was $0, making the entire $71.21 purchase price for the prescription dog food exempt from tax.

Leeds is bringing this action as a class action under Florida law. He proposes to represent a “class of all individuals residing in Florida who purchased prescription animal food from PetSmart retail stores located in Florida and were taxed for that portion of the purchase that relates to the sale of prescription animal food.”

He is seeking a judgment declaring PetSmart’s conduct as a FDUTPA violation, an injunction enjoining PetSmart’s conduct on a Class-wide basis, as well as an award of damages, court costs, and attorneys’ fees.

PetSmart has been under fire as of late regarding prescription pet food. In December, the pet supply chain became embroiled in another class action lawsuit that alleges it conspired to falsely promote prescription pet food with Nestle Purina, Mars Petcare, and Hill’s Pet Nutrition, as well as veterinary chains Banfield Pet Hospital and BluePearl Vet.

This antitrust class action, filed in California federal court, contends that there is no basis for every brand of pet food to call for a prescription, since they “contain no drug or other ingredient not also common in non-prescription pet food.”

Essentially, the lawsuit asserts that by falsely advertising and selling the pet food under the pretenses of a needing a prescription, the companies are in violation of California consumer protection laws.

Leeds is represented by Adam M. Moskowitz, Gail A. McQuilkin, and Michael R. Lorigas of Kozyak, Tropin & Throckmorton LLP.

The PetSmart Prescription Animal Food Sales Tax Class Action Lawsuit is Scott Leeds v. PetSmart Inc., Case No. 1:16-cv-25380, in the U.S. District Court for the Southern District of Florida.