Bad News For Whole Foods New York – $5 Million Tax Lawsuit Filed
A lawsuit has been filed against a Whole Foods store in New York City, claiming that they unlawfully imposed a sales tax resulting in excessive charges for customers.
According to the court documents, the class action lawsuit seeks damages exceeding $5 million, asserting that the store applied a tax to ready-to-eat, ready-to-heat, and ready-to-cook meals.
In accordance with New York state law, food must meet certain criteria to be eligible for tax exemption. It should be sold in its original form, condition, quantities, and packaging, similar to what is typically found in retail food stores. Additionally, if a food item is prepared, packaged, and refrigerated by the store but not arranged on a plate or in a “ready-to-eat” format, it should also be non-taxable.
As per the court documents, one of the plaintiffs involved in the class action lawsuit purchased green beans with capers and olives from the Whole Foods deli counter in October 2021 for $17.80. Allegedly, the store applied an 8.875% sales tax to the purchase.
The dish was prepared and packaged by the store, and it was not sold in a heated or plated form. The green beans were contained in a plastic container and sold by weight, accompanied by a custom label from Whole Foods. The lawsuit argues that this purchase should have been tax exempt according to New York state law.
Perhaps most strange is the context of the lawsuit. The fact the plaintiff noticed this and was willing to bring a class action forward for around $3 is relatively bizarre. Furthermore, why would Whole Foods try to make customers pay more for food if this money was going to go directly to the government, with no benefit to themselves? This would suggest that this incident would likely be a mis-pricing mistake, after all most of these decisions are made by machines.
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