State Farm Facing Certified Class in Sales Tax Depreciation Suit

Homeowners accusing State Farm Fire and Casualty Co. of improperly depreciating sales tax when calculating actual cash value benefits to policyholders can proceed as a certified class, a California federal court ruled.

Whether State Farm violated state law by depreciating sales tax when only physical property can depreciate is an issue that can be resolved on a classwide basis because it requires “the interpretation of one statute,” Judge William H. Orrick said for the US District Court for the Northern District of California.

Depreciating sales tax means to include the sales tax as part of the replacement cost of a ...