Peloton Charged Customers Illegal Sales Tax On Their Subscriptions – Class Action
Fitness company Peloton is facing a class action lawsuit alleging that they purportedly billed their customers of illegal sales tax in multiple states.
According to reports, different complainants from the states of Virginia, New York, and Massachusetts were unlawfully billed state sales taxes on their Peloton subscription plans.
Fitness Company Sued By Clients For Alleged Misdeeds
The Peloton Subscription Taxes Class Action Lawsuit argues that Peloton has violated several state laws by imposing sales taxes on their clients in contravention of the existing rules of the land.
Filed by two plaintiffs named Ryan Corken and Brannon Skillern in a New York federal court, the class action filing shared that Peloton knowingly required their customers to pay a sales tax on their Peloton subscription packages, although the law does not cover such a product or service.
Corken and Skillern argued that their and many more’s respective Peloton memberships enjoyed a tax-free status per the existing laws. Classified as digital goods, Peloton’s subscription services are purportedly tax-free.
The pair detailed that they availed memberships with Peloton for $39. Tagged as the company’s All-Access Membership option, it is said that complainants Skillern and Corken got billed for an additional 6% on top of the subscription fee for sales tax purposes.
However, the two retorted that Peloton does not have any right to do so, and state laws suggested that no such law can charge for digital services such as a Peloton All-Access Membership subscription plan.
In addition, the company has added an auto-payment feature for their customers in a bid to automatically charge their linked accounts for the subscription payments and the sales tax bills.
More Information Regarding The Peloton Members Subscription Sales Tax Class Action
Peloton reportedly charged many of its subscribers in the states of New York, Massachusetts, and Virginia of dubious sales tax bills, although they know very well that their membership subscriptions are exempt from the law. The company even continued this practice for years.
When confronted with the fact by angry clients, Peloton allegedly assured them that the sales tax charges were in accordance with the established local and state laws. But the truth is the exact opposite.
Although the company has already changed their subscription sales tax policies to drop their previous act, it is said that affected Peloton customers have not received any refunds or whatsoever for their payments. It is even indicated that Peloton’s illegal sales tax collections on their customers were not given to the authorities. The class action contends that Peloton pocketed large amounts of money for their own benefit.
The Peloton Subscription Taxes Class Action Lawsuit 2021 filing is seeking to represent Peloton subscribers and members who live in the states of Virginia, New York, and Massachusetts whose subscription payments got charged with unlawful sales tax.
Peloton, or officially known as Peloton Interactive, Inc., is a fitness company known for its interactive fitness platform service and other related products. Peloton also offers workout and fitness equipment, such as their well-known Peloton bike. The company is based in New York.
Editor’s Note on Peloton Subscription Taxes Class Action Lawsuit 2021:
This report details the class action lawsuit Peloton is currently facing in court in connection with the allegations being raised against them that they billed their customers of illegal sales tax on purpose. Another class action was filed against Peloton when a 6-year old got dragged under their treadmill.
Case Name(s) & No.(s): Brannon Skillern, et al. v. Peloton Interactive, Inc.; Case No.: 1:21-cv-06808
Jurisdiction: United States (U.S.) District Court for the Southern District of New York
Products/Services Involved: Peloton members subscription
Allegation(s): Fitness company Peloton has allegedly charged their clients of illegal sales tax on top of their subscription payments.
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