Sandals facing tax fraud class action suit
Sandals Resorts is being sued for at least $5 million by a former guest who claims the company pocketed taxes that should have been paid to Caribbean governments.
The lawsuit, filed in Florida, claims Sandals continued the alleged deceptive tax fraud for decades, but the company insists the allegations are ‘downright false’.
Regular guest, US resident Vitali Feldman, brought the class action against Sandals Resorts after staying at its properties in 2017, 2018 and earlier this year with his wife and two children.
He claims he was charged an all-inclusive tax rate of 12% of the total cost of his stay, but that the tax was retained in full or in part by Sandals instead of going to the relevant Caribbean governments.
Dailymail.com claims it has seen the court papers filed by the plaintiff’s Miami-based lawyers which state: "At all times material, it is represented to the public and Plaintiffs and others similarly situated that the ‘all inclusive’ packages include ‘all taxes’.
"The way the charges were presented to the guests was described in a deceptive way by labelling the charge(s) as a local government tax, when in fact Sandals was charging more money for the room."
Additionally, the filing accuses Beaches Turks & Caicos of collecting the accommodation tax on guests under 12 years of age, which is said to be illegal under Turks & Caicos law.
In a statement to DailyMail.com, a spokesperson for Sandals Resorts said: "Our customers are our top priority and under no circumstances would we exploit their faith in us.
"Our valued guests have never been unlawfully charged for taxes and allegations to the contrary are downright false. Not only do we conduct our business with pricing transparency, we meet all of our tax obligations in each of the islands where we call home."
"We take great pride in being the gold standard in the islands where we operate and have spent close to four decades providing guests with the most comprehensive vacation experience bar none."
It will ‘vigorously defend against these baseless allegations.’
In court papers, lawyers claim all guests of Beaches Turks & Caicos, which falls under Sandals Resorts’ ownership, paid a 12% accommodation tax.
However, the lawsuit claims Sandals had an agreement with the Turks and Caicos government allowing Sandals to retain ‘a significant’ chunk of the tax for its own use and benefit.
"The fees are nothing but profit-enhancers disguised as taxes that have a legitimate purpose, constituting a violation of the Florida Deceptive and Unfair Trade Practices Act," the suit claims.
Sandals Resorts is accused of running the same alleged scheme at its resorts in Grande Antigua, Barbados and Royal Barbados where guests are charged a 12.5% sales tax.
The class action lawsuit is seeking at least $5 million, exclusive of interest and costs.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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