GoPro, Inc. is the defendant in a proposed class action lawsuit that alleges the company collected fraudulently calculated sales taxes in Florida on “traded-in” products that, in fact, should have been taxed at their discounted price, not their original “full” price.
“The additional money that GoPro improperly collects from its customers as ‘sales tax’ on the difference between the item’s full price and its discounted price is, for all intents and purposes, a fraudulently-concealed surcharge,” the complaint summarizes. “Upon information and belief, GoPro retains these improperly charged funds."
What are we talking about here?
To help break down the suit’s allegations, it’s helpful to consider the plaintiff’s supposed situation. For a 30-day stretch in 2017, GoPro offered discounts to customers who purchased a new device while trading in a previous device as part of its now-defunct TradeUp program (the beginnings of which are best saved for another blog post). The TradeUp program, the lawsuit explains, allowed customers to mail in their existing GoPro in exchange for a $50 credit discount if he or she bought a Hero5 camera.
Florida law, the complaint continues, mandates that retailers like GoPro collect sales tax on discounted items, i.e. those traded in in exchange for another product, based on the discounted price of the traded-in product, not its full price. Florida law calls this a “dealer’s” discount, the complaint says.
The 30-page, seven-count complaint says the plaintiff traded in his previous GoPro camera and purchased a new one online in May 2017. The man, a Tampa resident, was allegedly overcharged sales tax on the full, non-discounted price of his new device, rather than on the discounted price of his trade-in.
What happened with GoPro’s TradeUp program?
The program was only set up to run from April 11 through May 11, 2017. A quick scroll through GoPro’s Support Hub will show that customers experienced some issues throughout the life of the program.
I’m still a little hazy on all of this.
Here’s an explanatory scenario from the complaint, pulled right from the Florida Administrative Code:
“A customer has a coupon issued by the dealer which allows $.50 off the sales price of a box of soap powder which retails for $1.50. The dealer collects $1.00 from the customer along with the coupon. Tax is due at $1.00, since the redemption of the coupon reduces the sales price of the product to that amount.”
The case says the Hero5 camera’s retail price was listed at $299.99. The plaintiff, since he traded in his older GoPro camera and received a $50 credit, should have been charged sales tax based on the Hero5’s TradeUp discounted price of $249.99, the lawsuit argues.
In total, the plaintiff claims he was improperly charged $270.99, $3.50 more than what he should’ve actually paid.
From here, the plaintiff goes on to allege the improper sales tax collected by GoPro is, “for all intents and purposes, a fraudulently-concealed surcharge” the company is not authorized to collect from consumers.
Who's covered by this lawsuit?
The proposed class named by the suit includes all GoPro customers who made purchases online and were incorrectly charged and paid sales tax on the full, non-discounted price of products bought using a dealer discount of trade-in credit within a period of time.