Investigation finds some tax-exempt candy still being taxed
SEATTLE -- The state's new candy tax may be eating a bigger hole in your wallet than it should as a Problem Solver found some merchants are charging tax on sweets that should be exempt -- and it's all completely legal.
Stores have more to sort through since the state's candy tax took effect. Yet many merchants are overlooking the differences that make some treats taxable, and others tax-exempt.
Candy made with flour is tax free, while those without are now subject to the sales tax.
But our investigation found some stores ring up the 9.5% tax regardless.
We bought a handful of candy from a Seattle convenience store. Under the tax exemptions, only one of our candies should have been taxed, but when we checked our receipt -- we found we were charged 87 cents in tax.
We should have only been charged 10 cents.
We checked, and found it's completely legal to overtax the consumer.
"If a retailer collects too much tax, there's really no law against that," said Mike Gowrylow with the state Department of Revenue. "The statute is silent on it, as long as they remit that tax."
In other words, businesses can collect tax on exempt candies and it's up to customers to catch the mistake.
"And that's not our preferred alternative," Gowrylow said. "We'd rather they check the regulations, became familiar with the products they are selling, and charge the sales tax when it's due, and not charge it when it's not due."
Now we did find some stores that did take the time to separate their sweets. We tested another store by specifically purchasing all tax-exempt candy, and sure enough, we were not charged any tax. This store's bar-code scanner was up to date with the latest exemptions list.
As for the others, "I'd say that's taxation without representation," said Hunter Boss.
So what to do if you're overcharged? You can stop shopping at that store, and/or you can apply for a refund through the Department of Revenue. The stores themselves are under no obligation to give your money back.
Stores have more to sort through since the state's candy tax took effect. Yet many merchants are overlooking the differences that make some treats taxable, and others tax-exempt.
Candy made with flour is tax free, while those without are now subject to the sales tax.
But our investigation found some stores ring up the 9.5% tax regardless.
We bought a handful of candy from a Seattle convenience store. Under the tax exemptions, only one of our candies should have been taxed, but when we checked our receipt -- we found we were charged 87 cents in tax.
We should have only been charged 10 cents.
We checked, and found it's completely legal to overtax the consumer.
"If a retailer collects too much tax, there's really no law against that," said Mike Gowrylow with the state Department of Revenue. "The statute is silent on it, as long as they remit that tax."
In other words, businesses can collect tax on exempt candies and it's up to customers to catch the mistake.
"And that's not our preferred alternative," Gowrylow said. "We'd rather they check the regulations, became familiar with the products they are selling, and charge the sales tax when it's due, and not charge it when it's not due."
Now we did find some stores that did take the time to separate their sweets. We tested another store by specifically purchasing all tax-exempt candy, and sure enough, we were not charged any tax. This store's bar-code scanner was up to date with the latest exemptions list.
As for the others, "I'd say that's taxation without representation," said Hunter Boss.
So what to do if you're overcharged? You can stop shopping at that store, and/or you can apply for a refund through the Department of Revenue. The stores themselves are under no obligation to give your money back.