A Whole Foods store in New York City is being sued for allegedly using a sales tax to overcharge customers.
The class action lawsuit, which has filed for over $5 million in damages, claims the store still applied a tax on ready-to-eat, ready-to-heat, and ready-to-cook meals, according to court documents.
New York state law says that, in order for food to be tax exempt, it must be sold unheated and in the same form, condition, quantities, and packaging as is typical of retail food stores. Additionally, if a food is prepared, packaged, and refrigerated by the store but not arranged on a plate or in a “ready-to-eat” format, it is also non-taxable.
According to court documents, one of the members of the class action lawsuit bought green beans with capers and olives from the Whole Foods deli counter back in October 2021 for $17.80. However, the store allegedly applied an 8.875% sales tax.
The dish was prepared and packaged by the store and was not sold heated or plated. The green beans were packaged in a plastic container and were sold by the pound with a Whole Foods custom label. The lawsuit says the purchase should have been tax exempt under New York state law.
New York City’s Department of Consumer Affairs has caught the store abusing the tax in the past.