POSTED ON SEPTEMBER 21, 2011:
Local Business Faces Lawsuit For Over Taxing Patrons
Have you ever gone out to eat or to a bar with friends, ordered a mixed drink or glass of wine, then been shocked by the price of your bill when it comes? You may want to start checking your receipts.
Eleven Oklahoma plaintiffs have filed a lawsuit stating about 800 liquor-serving establishments statewide are over-taxing patrons on their alcoholic drinks.
These citizens say roughly 40 percent of all businesses in Oklahoma who serve alcohol are guilty of this charge.
The suit, filed in Canadian County, accuses well-known businesses in the area, including McNellie's, Caz's, Applebee's and many others of over-charging (on liquor taxes) their customers for mixed drinks, wine and strong beers.
John Truel, the man named in the suit, said he researched his claim for over two years by going to different restaurants and bars throughout Oklahoma and ordering alcoholic beverages. After paying and receiving a receipt he could tell if he had been taxed appropriately or not. He estimates customers have been over-charged for millions of dollars worth of liquor taxes.
The crux of Truel's argument is in the advertisement, he said. When a business advertises the price of a mixed drink, it should already include the state's 13.5 percent alcohol tax.
Therefore, if a drink is priced at $6, the 13.5 percent tax should be included in the cost of the drink. If it's not, the cost of the drink is bumped to $6.81.
When the bill arrives, the state's 4.5 percent sales tax and other applicable taxes are added. However, Oklahoma businesses in the suit are accused of adding an additional 13.5 percent alcohol tax on top of the tax that should've theoretically already been included in the advertised price.
"There are a few different ways of pricing these people are attacking," explained Jeff Castleberry, owner of Caz's Chowhouse, a restaurant named in the suit. "The most common would be not including the liquor tax in the price of something on a menu. Several fine dining restaurants do this.
"Let's take a $50 bottle of wine for example. Many restaurant owners do not include the liquor tax in the price of the wine on their menu because it could make the wine seem unappealing to the customer. We do not do that here," Castleberry said.
"The price of any alcoholic beverage on our menu already has the 13.5 percent liquor tax already added in, so I am not really sure why we are involved in the lawsuit to begin with," he said.
Castleberry is just one of many business owners who are not sure why they have been included in the lawsuit. "I think this whole thing is supposed to be under the guise that they are doing what's right for the customers," Castleberry said. "In reality though, it is just some people looking for an easy pay day and unfortunately we all have to pay for it."
The ABLE Commission enforces laws pertaining to alcoholic beverages. The commission issued a statement: "While we issue licenses to mixed beverage establishments, we do not oversee the assessment, collection or remittance of gross receipt taxes by these licensees. The ABLE Commission is not a Plaintiff or a Defendant in this lawsuit."
Craig Riffel, of Mitchel, Gaston, Riffel and Riffel law firm, is an attorney defending several of the establishments in the case.
Riffel has attempted to discredit the plaintiffs in the lawsuit by stating they have filed the suit nine times beginning in October 2009. Each time it is the same lawsuit in the same county, Riffel said.
Previously filed suits were dismissed in February of this year. The current lawsuit was filed soon after the others were dismissed.
Riffel said, "The lawsuit has no merit whatsoever. It is really a poor use of our legal system.
"These current lawsuits are a blatant abuse of our legal process ... The plaintiffs seek to bully these respective restaurants into paying the plaintiffs money to which they are not entitled."
Hearings on the liquor lawsuits are scheduled soon in Canadian County. Riffel said he thinks the case will pick up speed following these hearings.
If the plaintiffs are successful, businesses could lose thousands of dollars. For example, JB's Steakhouse, a small steakhouse in Woodward, is being sued for $136,000.
If the suit moves forward, it could result in business closures.
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