A legal battle has been launched against Amazon in the United States, with a Tennessee resident accusing the online retail behemoth of systematically overcharging customers on state sales tax and then refusing to correct the error when confronted.
The Core of the Legal Complaint
In a class action complaint filed in a Washington state court last month, lawyers representing Cullen Duke of Tennessee allege that Amazon has 'routinely' levied excessive taxes on purchases made through its third-party marketplace. The lawsuit claims the company continued this practice even after being notified of the discrepancy.
The legal action seeks to compel Amazon to cease the alleged overcharging and to repay all affected customers. It also demands the company cover legal costs and pay punitive damages. According to the filing, Tennessee law designates Amazon, as the 'marketplace facilitator,' as the entity responsible for calculating, collecting, and refunding the correct sales tax for third-party sales on its platform.
Specific Allegations of Overpayment
The complaint provides a detailed, itemised account of the alleged overcharges. Cullen Duke resides in an unincorporated part of Sullivan County, just outside Kingsport, where the correct combined sales tax rate is 9.25 percent. However, the lawsuit states that for the past two years, Amazon has charged him and other local residents a rate of 9.5 percent.
This seemingly small difference led to multiple overcharges on individual orders, including:
- $1.28 in excess tax on a $13.45 moisture meter purchased in October 2024.
- $9.63 overpaid on a $101.34 towing light kit bought in February 2025.
- $126.89 in alleged overcharge on a $1,335.70 'Brake Buddy' remote braking device in February 2025.
Other items cited include a pack of CPAP mask liners and a box of ceramic tiles. While the total sum for Duke is under $2,500—a threshold that prevents a direct refund claim from the Tennessee Department of Revenue—the lawsuit aims to recover these amounts from Amazon directly.
Amazon's Defence and Wider Implications
The court documents reveal that Duke first notified Amazon of the incorrect tax charges on 1 March 2025. In a response dated 8 May 2025, Amazon reportedly attempted to justify the higher rate by stating it applied the tax associated with the 'origin of the shipment' for items originating within Tennessee.
The complaint forcefully counters this, asserting that the goods Duke purchased did not originate in Tennessee and, crucially, that Tennessee law requires the tax rate to be based on the delivery address of the purchaser, not the shipment origin. The lawsuit accuses Amazon of unfair and deceptive practices for failing to calculate the correct tax.
While the class action currently seeks to represent an estimated 40 affected Tennesseans, the case raises significant questions about whether similar overcharging could have occurred in other jurisdictions across the US where Amazon operates as a marketplace facilitator. The outcome could influence how online giants handle sales tax compliance nationwide.
The Independent has approached Amazon for comment. In a statement to Law360 last month, Duke's lawyer, Toby J. Marshall, said: "Reasonable consumers expect a company like Amazon to calculate and collect the correct amount of sales tax, and we believe the failure to do so is unfair and deceptive."
