Lawsuit Alleges NJ, NYC Customers Overcharged at Local Dunkin’ Donuts

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Dunkin Donuts Lawsuit

Two lawsuits filed on Monday in New York City and New Jersey allege that local Dunkin’ Donuts stores made over $14 million in profit over three years by charging state sales tax on nontaxable items. The plaintiffs, which include three NYC residents and two residents of Fort Lee, NJ, claim that stores in both states charged state sales tax at a rate of 8.875% and 7% respectively on unsweetened bottled water and bagged coffee, two items expressly exempt from such taxes.

The Lawsuits

The two separate suits, both address the same problem. One claims that the  store at 1430 Route 46 East in Fort Lee, NJ charged a 7% state sales tax on unsweetened bottled water, while the other identifies a location near New York’s Penn Station where customers paid 8.875% sales tax on pre-packaged coffee beans. Charging sales tax on either of these items is forbidden in both the New York and New Jersey state sales tax codes.

In addition, the attorneys representing the parties in this suit claim to have tested “a couple dozen” Dunkin’ Donuts franchises throughout NYC and NJ and found that many of them applied the mistaken sales tax. This leads them to believe that, over time, the franchises made $4 million in New Jersey and $10 million in New York through what they call an illegal “surcharge.”

Because of the wide-spread and lengthy nature of this claim, they are also attempting to get the court to certify these class action suits, opening up the possibility for other NY/NJ customers to make a claim.

Dunkin’ Donuts’ Response

Dunkin’ Donuts is headquartered in Canton, MA. A representative for the company explained that each individual store is owned by independent franchisees. However, they are expected to abide by all local, state, and federal laws including tax codes when operating their business. Denying any knowledge of the overcharges, the corporate arm of Dunkin’ Donuts is reaching out to the franchises identified in the suits in order to determine whether or not any intentional wrongdoing took place.

As for the plaintiffs, their attorney Carl Meyer expressed that his goal is to obtain “refunds or discounts” for the customers overcharged by these stores. He also expressed concern that other stores, perhaps nationwide, may have been charging similar markups.

Dunkin’ Donuts has over 1,000 locations in New York and New Jersey and 8,000 across the United States.