California Supreme Court – Customers may not use consumer protection laws to challenge a retailer’s sales tax determination

May 2014


In a 4-3 decision, the California Supreme Court held that the reach of state consumer protection laws does not extend to sales tax disputes. The court found that customers have no judicial recourse against a retailer to challenge sales tax determinations because only the retailer, who is the taxpayer, can seek an official determination of whether sales tax is actually owed. The tax code, to the exclusion of consumer protection laws, provides the exclusive means by which disputes over the taxability of a retail sale may be resolved. However, the court suggested that consumers may file suit to compel retailers to seek refunds before the Board with such refunds conditioned on being remitted to the customers.

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