Dunkin' Donuts in New York, New Jersey sued over sales tax; Might have overcharged residents by $10M
Feb 10, 2016 12:41 AM EST
New York and New Jersey residents accused Dunkin' Donuts of overcharging in the guise of taxes for non-taxable goods. Three people from New York and two from New Jersey claimed that Dunkin' Donuts have no clue about sales tax.
The lawsuit states that customers had to pay sales tax on coffee beans, bottled waters, and ground coffee, as reported by Fortune. The suit claims that these products are exempted from tax. Carl Mayer, the lawyer who filed the complaint said that Dunkin' Donuts should stop dunking their customers and provide customers with discounts or refunds so they are made whole. The lawyer estimated that the chain could have earned an extra $10 million for fraudulently charging sales tax. "The unlawful surcharge is disguised as a 'sales tax' on the customer's receipt," said the New Jersey attorney.
Ron and Carol Frate, the main plaintiffs in New Jersey, insisted that they were overcharged at Dunkin' Donuts at 1430 Route 46 East in Fort Lee. North Jersey reported Mayer seeks to have the suits certified as class actions. The lawyer claims that thousands of residents from New Jersey were unknowingly affected by such practice. Mayer added that Dunkin' Donuts had been warned about the issue earlier, but failed to rectify it.
According to New York Post, spokeswoman Michelle King of Dunkin' Donuts said that the corporate office is "in the process of reaching out to its franchisees to get to the bottom of the issue." Dunkin' Donuts has over 1,000 branches in New York and New Jersey that are owned and operated by individual franchisees.
Another spokesman, Justine Drake said that these franchisees are expected to comply with all applicable federal and state legislations, including those relating to taxation. The suit asked Dunkin' Donuts restaurant that practices overcharging face punitive damages and is forced to disgorge the profits they acquired from such practice.