The District of Columbia attorney general is suing grocery-delivery service Instacart for failing to pay hundreds of thousands of dollars in District sales tax.
Under District law, Instacart has been responsible for collecting sales tax on the delivery services it provides. But the entire time Instacart has operated in the District, it has failed to collect sales tax on the service fees and delivery fees it charged users, the AG maintains.
Additionally, the AG alleges that Instacart violated District tax law and failed to collect hundreds of thousands of dollars in sales taxes on delivery and service fees it collected. OAG is seeking restitution for consumers who paid deceptive fees, back taxes and interest on taxes owed to the District, civil penalties and costs.
The AG is seeking civil penalties for violating consumer protection law, penalties for violating tax law, interest on unpaid taxes, and costs for the investigation, among the fee claims.
Are you ensuring you are charging sales tax on all your taxable products, fees and services? Even “Covid surcharges” that have become popular over the last few months could be taxable. Be sure you understand your nexus and sales tax requirements so you don’t get in hot water for what you thought would be a minor issue.