Tax News

CCH (cch.taxgroup.com) reports:

  A U.S. district court dismissed for lack of standing consolidated putative class actions that claimed that several wireless phone companies and other entities involved with the sale of wireless telecommunication services had engaged in the unfair and deceptive practice of charging consumers California sales tax on the full retail value of wireless phones that were advertised as "free" or at substantial discounts, in violation of California's Unfair Competition Law and False Advertising Law. The court found that the plaintiffs that brought the claims did not suffer injury as the direct result of the phone companies' advertisements as the evidence presented indicated that :

  -- one of the plaintiffs based her claim on an in-store purchase that she said she entered into as a result of an Internet advertisement that specifically limited the offer to on-line sales and stated that sales tax charges were extra;

  -- one of the plaintiffs stated that he probably would have purchased the phones even if he had known that sales taxes would be charged on basis of the phones' full retail value; and

  -- one of the plaintiffs had a history of trading in her phone every two years when her contract expired, and therefore could not show that her purchase of the phone was the result of the phone companies' advertisement.

  
Laster v. T-Mobile USA, Inc. , United States District Court, Southern District of California, No. 05cv1167, December 14, 2009