Kim Kardashian’s Skims pays $200K to settle a New Jersey investigation into charging unlawful gross sales tax on clothes for five straight years.

Kim Kardashian and her billion-dollar style empire simply took a serious monetary hit.

Her shapewear firm, Skims, agreed to pay $200,000 to settle allegations that it illegally charged New Jersey prospects gross sales tax for 5 straight years.

New Jersey Attorney General Matthew Platkin introduced the settlement on Tuesday after investigators found Skims Body Inc. collected 6.625% gross sales tax on clothes purchases between 2019 and 2024.

The downside? Clothing and footwear are fully exempt from gross sales tax underneath New Jersey state legislation.

The investigation discovered that Skims engaged in “unconscionable business practices” by charging prospects taxes they by no means owed. Attorney General Platkin didn’t maintain again in his assertion in regards to the movie star model’s actions.

“We’re holding Skims accountable because their conduct harmed New Jersey consumers by requiring them to pay more than what they owed,” Platkin said. “We won’t tolerate conduct that unlawfully takes money out of the pockets of hard-working New Jerseyans.”

Skims known as the five-year tax assortment a “technical error” of their gross sales tax system. An organization spokesperson stated they fastened the issue and began reaching out to affected prospects for refunds.

“We remain deeply committed to the highest standards of compliance and have implemented enhanced safeguards to prevent any recurrence of similar issues,” the Skims spokesperson said.

The consent order, signed January 16, requires Skims to pay the $200,000 civil penalty instantly. The firm should additionally use “best efforts” for the following 4 years to determine and refund prospects who paid the bogus taxes.

Skims already remitted all of the improperly collected gross sales tax cash to the New Jersey Division of Taxation earlier than the settlement was introduced. The firm had been issuing refunds to complaining prospects even earlier than the formal settlement was reached.

The shapewear model, valued at $5 billion in keeping with Fortune journal, primarily serves Gen Z and millennial prospects. The firm’s speedy development has made it one of the crucial profitable movie star style ventures lately.

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