Consumer Watchdog Urges California Supreme Court to Review Anti-Consumer Decision in Sales Tax Case

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Santa Monica, CA — The California Supreme Court should review a decision that would prevent consumers from seeking refunds when they are illegally taxed, according to an amicus curiae letter submitted by Consumer Watchdog.

In McClain, et al. v. Sav-On Drugs, et al., the California Court of Appeal ruled that consumers who have been wrongfully charged for sales tax may not go to court to seek a refund. The March 13 decision rejected the claims of diabetic consumers that they were entitled to a refund of sales tax on purchases of diabetes testing equipment, which is exempt from sales tax under California law.

Click here to read the full text of Consumer Watchdog’s McClain amicus letter.

According to the letter, if the California Supreme Court does not correct the McClain opinion, “the State will have money escheated to it, with no due process rights for any consumer in California to sue either the retailer or the Board of Equalization. In other words, all consumers, not just the millions of diabetics who already paid millions of dollars in sales tax in this case, will be left with no realistic ability to challenge the wrongful taking of moneys from them based on the improper collection of sales tax reimbursement.”

This is not the first time Consumer Watchdog has weighed in on this issue. In 2009, Consumer Watchdog submitted an amicus letter in Loeffler v. Target Corp., a Court of Appeal case holding that consumers could not use California’s consumer protection laws to sue for refunds of unlawful sales tax. Click here to read that 2009 letter.

The California Supreme Court’s decision whether to grant or deny review of the case could come down at any time.


Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

Jerry Flanagan
Jerry Flanagan
Jerry Flanagan is Consumer Watchdog's Litigation Director. Flanagan leads Consumer Watchdog’s litigation efforts in the areas of health insurance coverage and access to treatments. He has over 20 years experience working in public interest and health care policy, legislation and litigation.

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