Etsy Dodges Class Action for Adding Sales Tax To Face Masks During Pandemic

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Etsy Face Mask Tax Class Action Lawsuit:

• Who: Etsy and Outdoor Research have escaped a class action lawsuit alleging trade law violations.
• What: Vince Ranalli sued the companies for adding sales tax to face masks during the pandemic, despite an executive order suspending the tax on masks.
• Where: The class action is being litigated in Pennsylvania federal court.

Etsy and Outdoor Research have dodged a class action lawsuit accusing the companies of violating Pennsylvania law by collecting sales tax on face masks during the pandemic.

US District Judge Robert J. Colville dismissed plaintiff Vince Ranalli’s claims against the companies, saying that sales tax was a public duty imposed by statute and was not an act of “trade or commerce,” meaning it could not be subject to state trade laws, Law360 reports.

Ranalli argued in his class action lawsuit that Etsy and Outdoor Research violated Pennsylvania law by adding the state sales tax to face mask sales, despite an emergency order from Governor Tom Wolf which made masks exempt from sales tax during the pandemic. 

He sued for violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.

Etsy’s Sales Tax on Face Masks Not False Advertising, Rules Judge Tossing Class Action

Judge Colville rejected the class action claims under the law and said in his decision that there was no apparent intent for the retailers to deceive customers or otherwise violate consumer protection law. Colville cited numerous other recent similar decisions in his ruling.

“Plaintiff does not allege that either defendant misrepresented the characteristics of the face masks he purchased, only that they were not taxable, which is not a characteristic of the product in and of itself,” he wrote.

He added that there was no allegation of the retailers intentionally engaging in false advertising, “or the proverbial ‘bait and switch.’”

“We see no factual allegations in support of the claim that the defendants acted unfairly or deceptively such that those actions would tend to deceive.”

Colville tossed all of Ranalli’s claims, including unjust enrichment and fraud, noting that none of the tax money collected by the retailers was for their enrichment, with it all going to the Commonwealth.

“It is clear that collection of the sales taxes was not for profit or revenue but rather for basic compliance with the law.”

Etsy is not the only retailer accused of assessing sales tax on face masks during the pandemic. A sales tax class action lawsuit was filed against several companies last year: American Eagle Outfitters, Foot Locker, Kohl’s, J. Crew, The Gap, Hot Topic, Carter’s, Chico’s, Express, Francesca’s, Gabriel Brothers, Genesco Inc., Tapestry Inc., Vera Bradley Inc. and Walgreens.

Big Lots, Dollar General, Giant Eagle, Jo-Ann’s, Ollie’s Bargain Outlet, Home Depot, Tuesday Morning, Ulta Beauty and Walmart were also accused of charging illegal sales tax of 6 to 7 percent on purchases of face masks in Pennsylvania. 

What has your experience been buying face masks during the pandemic? Let us know in the comments section below!

The plaintiff is represented by Gary P. Hunt and Kathleen A. Nandan of Tucker Arensberg PC, and Kevin P. Broughel, Stephen J. Turanchik and Zachary S. Zwillinger of Paul Hastings LLP.

The Etsy Face Mask Sales Tax Class Action Lawsuit is Ranalli v. Etsy et al., Case No. 2:21-cv-00088, in the U.S. District Court for the Western District of Pennsylvania

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