Tire Rack Subject to New York False Claims Case Over Sales Tax

A whistleblower who accused Tire Rack Inc. of evading sales tax obligations sufficiently alleged that the company had a physical presence in New York to allow his lawsuit there, a state appeals court ruled.

Steven Fruchtman alleged that from 2008 to 2018, the tire retailer was required to collect New York sales tax because the company maintained a a network of “recommended installers” who performed tire installations for its New York customers.

Tire Rack’s evidence “failed to utterly refute” Fruchtman’s allegations that the installer network constituted the required physical presence for the lawsuit, the New York Supreme Court, Appellate Division, ...