Sandals Class Action Says Resorts Keep Local Taxes

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A class action lawsuit has been filed against Sandals alleging that the taxes they collect from their customers is supposed to go to the local government, but the resorts pocket the money instead.

Plaintiff Michael McCoy says Sandals claims that they charge the traveler a single price for their vacations, which includes any taxes. This includes all local taxes that will be paid to the local government.

The Sandals class action lawsuit claims, “This overall impression is false, and is likely to deceive objective consumers due to the Defendants’ various omissions.”

The plaintiff alleges that he took his wife and two children on numerous Sandals vacations and paid the unfair and deceptive tax each time they booked a trip.

“Defendants never disclose that they only remit a percentage of the amounts they collect as ‘taxes’ from the consumers to the government, illegally retaining the rest for themselves,” the Sandals class action lawsuit states.

The plaintiff alleges that Sandals is the only resort in the area that doesn’t itemize taxes, which they refuse to do.

The Sandals vacation class action lawsuit shows as an example an “accommodation tax” of 12 percent which is paid by all guests at Sandals’ Turks and Caicos resort.  

In addition, the plaintiff claims that there is a “Tax Retention Agreement” between Sandals and the government of Turks and Caicos which allows Sandals to keep some of the “accommodation tax.”

“These tax charges are used to generate extra profit at the expense of Plaintiff and others similarly situated, who were deceived into believing the fees are legitimate charges directly related to Sandals’ owed and paid taxes to the government. In fact, the fees are nothing but profit-enhancers disguised as taxes that have a legitimate purpose, constituting a violation of the FDUPTA,” the Sandals Resorts class action lawsuit alleges.

Also, guests at other resorts in Antigua and Barbados were charged a 12.5 percent sales tax before January 2017. There was also a “Tax Retention Agreement” in place between Sandals and the Antigua and Barbuda government for Sandals to hold onto some of that tax money.

A similar lawsuit was filed in May of this year alleging that Sandals keeps the tax fees that are supposed to go to the local government.

In addition, the plaintiff alleges that Sandals also collects taxes for guests under the age of 12, which is not allowed by law.

“Indeed, Defendants admit that they have collected this illegal tax for guests under 12-years-old in that they have recently filed a lawsuit seeking a refund from the Turks and Caicos government for the portion of that illegal tax they collected from guests under 12-years-old and remitted to the government,” the Sandals class action lawsuit claims.

The plaintiff has filed this class action lawsuit under the Florida Deceptive and Unfair Trade Practices Act, which does not allow “unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

McCoy is represented by Michael A. Winkleman, Jason R. Margulies, Marc E. Weiner, and Daniel W. Grammes of Lipcon Margulies Alsina & Winkelman P.A. and Adam Moskowitz, Howard M. Bushman, and Joseph M. Kaye of The Moksowitz Law Firm PLLC

The Sandals Resorts Local Taxes Class Action Lawsuit is McCoy v. Sandals Resorts International LTD, et al., Case No. 1:19-cv-22462-BB, in the U.S. District Court for the Southern District of Florida.