The Jamaica-based Sandals Resort International (SRI) says it intends to “vigorously defend” a class action law suit filed in the United States that claims the hotel chain engaged in deceptive tax collection practices for decades.
“The Class Action lawsuit recently filed against Sandals in the US District Court for the Southern District of Florida is baseless, both in fact and law, and will be vigorously defended by Sandals,” SRI said in a statement.
It said that the “assertion that Sandals has not paid taxes due to the government is categorically false. We are proud to be the Caribbean’s largest private employer and in many of the countries in which we operate, we are the biggest economic contributor and taxpayer.
“Our operations in all territories have been subject to regular audits that have, without exception, always delivered clean reports,” it said.
Earlier this month, the Miami-based law firm Lipcon, Margulies, Alsina & Winkleman, filed the suit in the Southern District of Florida claiming that “deceptive charges are used to generate extra profit at the expense of [guests], who are deceived into believing the fees are legitimate charges directly related to Sandals’ taxes to the government.”
The suit alleges that all-inclusive Sandals properties throughout the Caribbean have charged guests fees that claim to be local government taxes but are instead retained by Sandals in part or in full “for their own use, benefit and profit.”
The lawsuit highlights, in particular, a 12 per cent accommodation tax that is currently collected at Sandals’ Beaches Turks & Caicos resort, with the majority of that fee allegedly being retained by Sandals as part of an agreement with the Turks & Caicos government.
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.
Also cited in the filing is a 12.5 per cent sales tax that was collected by the Sandals Grande Antigua, Sandals Barbados and Sandals Royal Barbados resorts prior to 2017 and allegedly retained in part by Sandals.
But in the statement, SRI said that “class action lawsuits are often intended to coerce a company into settlement to avoid high litigation costs and negative publicity.
“We have never imposed unlawful and inappropriate charges on our guests and will not cower to false tactics that claim otherwise.
“In this digital age – when anybody can say anything, however untrue – trust and track record remain paramount. Our reputation and relationships with our valued guests are four decades in the making, which is why our guests continue to put their faith in us, year after year.
“For these reasons, Sandals intends to fight this lawsuit to the end as nothing less than a clean slate will do,” SRI said in the statement.