Class action filed against Papa John's over sales tax on delivery fee

A class action suit has been filed against Papa John’s pizza claiming it improperly charges sales tax on delivery fees.

In the suit filed May 5 in Madison County Circuit Court, lead plaintiff Zachary Tucker of Wood River claims he was charged a $2.39 delivery fee, plus an additional 16 cents in sales tax for the non-taxable delivery service.

Tucker is represented by attorneys at Carey, Danis and Lowe in St. Louis and by attorneys at Wagner, Vaughan and McLaughlin in Tampa, Fla.

The suit claims that sales tax may only be imposed on the total sales price of taxable tangible property. The sales price is the total amount paid for tangible goods including services that are part of the sale; however, when a customer has the option to either pick up goods or have the goods delivered - as is the case for all Papa John’s orders - a seller may not legally charge sales tax on a separate charge for delivery where the cost of delivering the merchandise is equal to or exceeds the delivery fee, the suit claims.

“To the extent the actual cost of delivery is less than the delivery fee itself, under Illinois law, Papa John’s is permitted to charge sales tax only on the excess amount,” the suit claims.

“Despite clear Illinois law to the contrary, Papa John’s and its franchise stores have in the past charged and continue to charge sales tax on the entire delivery fee.”
Among other things, the suit claims violations of the Illinois Consumer Fraud Act, the Uniform Deceptive Trade Practices Act.

It seeks class certification, declaratory judgment ordering defendants to cease and desist charging sales tax on delivery fees, restitution, as well as compensatory, consequential and statutory damages, interest, fees and costs, and other relief.

Madison Count Circuit Court case number 14-L-668.