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Pepperdine University School of Law

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Sunday, May 28, 2006

L.L. Bean Wins Class Action Lawsuit Over Alleged 27-Cent Sales Tax Overcharge

On Friday, the Maine Supreme Court held that L.L. Bean properly charged Maine sales tax on the gross retail price and rejected the class action plaintiffs' contention that the tax should have been applied to the net price after subtracting the value of coupons. Flippo v. L.L. Bean, 2006 ME 62 (5/26/06).

The lead plaintiff had used a $5 coupon obtained when she signed up for an L.L. Bean MBNA credit card and claimed that the store overcharged her by 27 cents by applying Maine's 5.5% sales tax to the gross purchase price. Had she prevailed, L.L. Bean would have been required to refund over $1 million in sales tax paid on the value of coupons, with the plaintiffs' attorneys receiving over 1/3 of the recovered amount.

Press reports:

http://taxprof.typepad.com/taxprof_blog/2006/05/ll_bean_wins_cl.html

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