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McClain v. Sav-On Drugs … (2019)

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Consumers May Not Sue Retailers for Refunds of Alleged Excess Sales Tax Reimbursement When There Has Not Been a Prior Determination That Excess Sales Tax Reimbursement Was Collected and That a Refund Is Owed

Plaintiff consumers brought a putative class action against several retailers seeking a refund of alleged excess sales tax reimbursement collected by the defendant retail pharmacies on sales of skin puncture lancets and glucose test strips, which the plaintiffs claimed were exempt from sales tax. Plaintiffs asserted actions for breach of contract, negligence, and violations of consumer protection statutes, seeking declaratory and injunctive relief to compel the defendant retailers to file a tax refund claim with the Department and order the Department to award refunds to be passed on to consumers. The California Supreme Court held that a consumer (non-taxpayer) could not maintain a cause of action against a retailer (taxpayer) to compel it to file a claim for refund of alleged excess sales tax reimbursement collected because there had been no prior determination by the CDTFA that excess sales tax reimbursement was collected and that a refund was owed. McClain, et al. v. Sav-On Drugs, et al. (2019) 6 Cal.5th 951.