May 28, 2006
Coupons Don't Give Tax Discount
Over at Tax Prof Blog, our colleague Paul Caron is reporting on L.L. Bean's win in a class-action lawsuit claiming that the firm improperly collected Maine sales tax on the gross price of items, instead of the price after deducting coupons.
One interesting fact is that even though the state tax assessor had told Bean to collect the tax and the money had gone to the state, and the state assessor supported Bean's position in the litigation, the retailer lost in the lower Maine courts (exposing it to about $1 million in refund claims) before winning a reversal in the state supreme court. It's unlikely the state will pay Bean's legal fees for doing what it was told to do.
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