Can a business charge sales tax based on an item’s original price instead of sales price? – WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale
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(WSVN) – He found a TV on sale and decided to go ahead and order it. He thought it was a great deal … until he saw how much they were charging in taxes. It’s why he called Help Me Howard with Patrick Fraser.
If you were told what Michael does, you might not believe it until you see it.
Amazon and Best Buy send Michael their merchandise to review. From kitchen appliances to a curved computer screen, a wine cooler, and the day we were there, he was asked to write about these ear buds.
Michael Meislik: “Review it, test it, play with it, see what it does, what it doesn’t do.”
After writing his review, Michael gets to keep the product. But one thing he has not been offered is a TV like this.
And when he decided to buy one, he turned to people like himself.
Michael Meislik: “And then I researched comments, reviews, what people thought, and decided on a particular TV.”
It was this 85-inch model.
Michael Meislik: “One of the best places to get a TV with an extended warranty would be BJ’s Wholesale Club.”
Michael bought it it. Then as he looked at his receipt, something caught his eye: the sales tax.
Michael Meislik: “And I multiplied the total amount and the cart times 7%, which is Miami-Dade tax rate, and the rate was way over what it should be.”
The TV was on sale for $1,627, meaning the 7% sales tax should have been $113. But BJ’s charged the tax on the original $2,999 price, making the sales tax $209.93 cents, costing Michael an extra $96 in sales tax.
Michael Meislik: “A little bit surprising, unpleasant, unwanted.”
Michael contacted BJ’s to make sure it wasn’t an accounting error. The company rep said, nope, that’s the way they did it.
Patrick Fraser: “So you were you paid the taxes on what they wanted to sell it for, not what they sold it to you for?”
Michael Meislik: “Yes, exactly.”
Michael and Miriam are happy with the TV, not happy with the taxes on the TV.
Michael Meislik: “It’s wrong any way you look at it. Where is this excess money going, and is this legal?”
Well, Howard, can a business charge a sales tax like this?
Howard Finkelstein, 7News legal expert: “This is weird, complicated and confusing, but it is legal. The courts have ruled that if the discount comes from the store, then you pay taxes on the sales price. If the discount comes from the manufacturer, then you pay sales taxes on the higher original price.”
We asked BJ’s corporate office why they decided to charge taxes on the full price instead of the sales price.
They didn’t answer the question but believe their customers understand their policy writing, “We provide this information to our members in the relevant promotional materials.”
Michael says he wasn’t told about it.
A long list of customers have tried to sue BJ’s over their policy, claiming it’s misleading. So far, BJ’s has won in court, meaning Michael won’t get that extra sales tax money back, but BJ’s does have to turn it over to the state and county.
Michael Meislik: “Sometimes it’s a little hectic with all the reviews.”
And if you are thinking, “How can you get companies to send you products to review?” Michael didn’t find them, they found him after reading his reviews of products he had bought online.
Michael Meislik: “I review everything: office paper, pens, pencils, whatever I’m purchasing. So I think that’s how they picked me up.”
A tip from Michael: Don’t just say a product is good or bad, explain why.
Now, to make sure you are not being charged sales tax you don’t think you should pay, check your receipt, ask questions. If you don’t like the answers, walk away, because you worked hard for your money.
A problem taxing you? Want someone to review it? Ship it to us, because we charge the perfect rate: zero.
With this Help Me Howard, I’m Patrick Fraser, 7News.
CONTACT HELP ME HOWARD:
Email: helpmehoward@wsvn.com
Reporter: Patrick Fraser at pfraser@wsvn.com
Miami-Dade: 305-953-WSVN
Broward: 954-761-WSVN
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