HACKENSACK - A Leonia man has started a class-action lawsuit against the Costco Wholesale Corporation, claiming the business illegally charged him sales tax on toilet paper.
File photo of a Costco store. (AP Photo | Paul Sakuma)
Robert Arnold, 55, claims he and his wife purchased Charmin toilet tissue from the wholesaler twice in July 2015 - once at the Wayne store and another time at the Hackensack store, which has since closed and moved to Teterboro.
During each purchase, Arnold was charged a 7 percent sales tax, according to a lawsuit filed in Bergen County Superior Court.
According to the New Jersey Sales Tax Guide, sales of disposable household paper products such as toilet tissue are exempt from sales tax.
Arnold did not realize he had been charged sales tax until he later went over his receipts, according to his attorney, Rosemarie Arnold of Fort Lee. The attorney is not related to Robert Arnold.
"He took both receipts and went back to the Hackensack store," the attorney said.
Store employees told Arnold they could not refund his money and that he had to fill out forms, submit them to Costco's corporate office and that his money would be mailed to him, Rosemarie Arnold said.
"He said, 'Why should I take an hour of my time to do this when you shouldn't have charged me in the first place?'" the attorney said.
The suit accuses Costco of fraud, unjust enrichment and negligence. The filing claims the business violated the New Jersey Consumer Protection Act, the Truth-In-Consumer Contract Warranty and Notice Act, and New Jersey common law.
"Hundreds of thousands of New Jersey residents have paid a 7 percent surcharge in the guise of a sales tax when purchasing toilet tissue at" New Jersey Costco stores, the lawsuit claims.
The lawsuit alleges Costco has "a policy and practice" of charging unlawful sales tax on its products. It also seeks to reimburse plaintiffs and anyone else joining the class action suit who were forced to pay sales tax as well as punitive damages.
In May 2015, a federal class action lawsuit was brought against Costco in California, alleging the retailer collected more sales tax than it should have on products that included manufacturer rebates.
"Despite the public scrutiny," the lawsuit says, "Costco continues to flaunt the law to this day."
Costco declined to discuss the lawsuit on Wednesday.
"Unfortunately, we are not able to provide a response at this time," a corporate spokeswoman stated in an email.
Anthony G. Attrino may be reached at tattrino@njadvancemedia.com. Follow him on Twitter @TonyAttrino. Find NJ.com on Facebook.