A proposed class action claims Victoria’s Secret has overcharged for sales tax on purchases delivered to Missouri addresses from an out-of-state facility.
The 15-page lawsuit alleges that although Missouri’s use tax for goods shipped to purchasers in the state from an out-of-state facility is 4.225 percent, defendants Victoria’s Secret Stores, LLC and Victoria’s Secret Direct, LLC have charged tax for such purchases at a much higher rate.
According to the case, Missouri law specifies that intrastate sales are taxed at a rate of 4.225 percent plus any applicable local sales tax. Although there is an exemption from sales tax for “retail sales as may be made in commerce between this state and any other state of the United States,” known as the “in commerce” exemption, such sales are subject to Missouri’s compensating use tax law, the suit says. Per the case, the state imposes a use tax on “the privilege of storing, using or consuming within this state any article of tangible personal property.”
“Accordingly,” the complaint reads, “any taxable sales transaction involving the in-bound shipment of tangible personal property from an out-of-state location to a purchaser in Missouri that is exempted from sales tax by Missouri’s statutory ‘in commerce’ exemption is subject to the compensating use tax.”
Victoria’s Secret, which sells lingerie, clothing and beauty products through its retail stores and online, was therefore required to charge a use tax rate of 4.225 percent plus any applicable local use tax in effect at the delivery address of the Missouri purchaser, the lawsuit alleges.
Despite what the case describes as “clear Missouri law to the contrary,” the defendants, according to the suit, have charged and continue to charge excess “tax” on sales of their products through remote sales channels that are shipped from out-of-state facilities to Missouri purchasers.
The plaintiff says he bought in March 2021 various items from Victoria’s Secret’s website for personal, family or household use for delivery to a Chesterfield, Missouri address. Though the items were shipped from out of state and despite the fact that the applicable sales tax for such a purchase was 4.225 percent, Victoria’s Secret required the plaintiff to pay an 8.740 percent sales tax, “resulting in the overcollection of monies,” the suit, which was recently removed from St. Louis County Circuit Court to Missouri’s Eastern District Court, alleges.
The plaintiff looks to represent anyone who, during the five-year period before the lawsuit was filed, purchased a product from Victoria’s Secret for personal, family or household use through a remote sales channel, including the defendants’ website, that was delivered from an out-of-state facility to a Missouri address and was charged sales tax at a higher rate than the lower use tax rate.
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