BY NICHOLAS PUGLIESE
STAFF WRITER | THE RECORD
September 16, 2016, 7:45 PM
A Leonia couple have filed a class-action complaint against Costco Wholesale, alleging that they were illegally charged sales tax on toilet paper at the retailer’s stores in Wayne and Hackensack.
Robert Arnold and Jacqueline Taufield lost only about $6, their attorney said, but their suit could have a big financial impact. They allege in their complaint that more than 100,000 customers could have been similarly affected.
“Conceivably, Costco has to return all of their money plus interest,” said the attorney, Rosemarie Arnold, who has no relation to Robert. “Plus, in this particular case, I think punitive damages are warranted because they know they can’t be charging tax on toilet paper.”
Lawmakers in New Jersey and many other states have exempted toilet tissue and other necessities to keep lower-income consumers from paying extra for things they must use on a daily basis.
Robert Arnold and Taufield allege in their complaint that they were charged a 7 percent sales tax when they purchased Charmin Toilet Tissue at Costco locations in Wayne and Hackensack. Both transactions occurred in July 2015.
When they asked managers for a refund, they were refused and told to contact Costco’s headquarters in Washington state, Arnold, the attorney, said Friday.
“Despite being aware of the illegality of their actions, Costco Wholesale continues to cheat their customers, causing them to incur monetary damages when they purchase toilet tissue,” the couple allege in their complaint.
The couple accuse the warehouse giant of breach of contract, unjust enrichment, negligence and fraud, as well as violating the New Jersey Consumer Fraud Act and something known as the Truth-In-Consumer Contract, Warranty and Notice Act.
Another open question, Arnold said, is what Costco is doing with the money that they are collecting on the toilet paper.
“I think that they’re keeping it because if they’re turning it over to the government, isn’t the government going to say, ‘This isn’t taxable’?” she said.
“Unfortunately, we are not able to provide a response at this time,” a Costco spokeswoman said when reached for comment on Friday.
Costco is the second largest retailer in the United States and has about 18 locations in New Jersey, according to the complaint.