The Washington Court of Appeals recently upheld the dismissal of a putative class action brought against four grocery store chains that collected sales tax on sales of 100 percent juice beverages. A taxpayer alleged that the grocers violated Washington’s Retail Sales Tax Act and Consumer Protection Act by wrongfully collecting sales tax on the exempt beverages. The court held that the taxpayer’s allegations were tantamount to a tax refund claim that could only be brought against the state Department of Revenue. Washington’s regulations provide that a taxpayer aggrieved by the amount of tax paid could not maintain “any action or proceeding” to recover paid taxes except against the state, and therefore the taxpayer could not bring an action against the grocers through creative pleading. Where a taxpayer seeks a refund of a tax already paid, the procedural requirements (to seek administrative remedies against the Department) remain the same no matter the reasoning presented in support of the claim.
Caneer v. Kroger, No. 85009-1-I (Wash. Ct. App. Div. 1, 2024).