Fact Check: Walgreens charging sales tax on COVID tests
ROCHESTER, N.Y. (WHEC) — At-home COVID-19 tests. A lot of you have been buying them. Before you buy any more, you better check your receipts. A local woman emailed News10NBC saying she was charged illegal sales tax on COVID tests at Walgreens. News10NBC’s Nikki Rudd checked the facts.
Morgan bought four BinaxNOW COVID-19 rapid at-home test kits from Walgreens online. She wanted to test before getting together with her family for the holidays. When she looked at the order summary, she saw this:
Item subtotal: $95.96
Store pickup: FREE
Sales tax: $7.68
Order total: $103.64
Then she bought some in-store. She checked the receipt, and once again she was charged sales tax.
Morgan claims this happened at the Walgreens in Spencerport and the Walgreens in Gates on Long Pond and Lyell. She checked around and says this only happened at Walgreens, not at CVS, Wegmans or Walmart.
First, I confirmed with the New York State Department of Taxation and Finance that COVID tests kits sold at stores are not subject to sales tax. It’s true. You should not be getting taxed.
Next, I reached out to the corporate office at Walgreens.
Karen May, the Leadership Communications Senior Manager at Walgreens, told me, "With the urgency to get these new COVID at-home tests available in stores and being a new product with no taxability guidance issued from New York State, retailers were left to figure out taxability."
May said once they got more information and guidance from the state the registers at Walgreens were adjusted.
However, according to state tax and finance officials medical test kits have long been exempt from New York State and local sales tax and COVID test kits fall under this umbrella. So this never should have happened.
When Morgan tried to get answers from Walgreens she kept getting the run-around, but after News10NBC reached out to Walgreens and the state we got results.
The NYS Department of Taxation and Finance reached out to both stores where Morgan was charged sales tax. State officials say those stores have updated their systems to exempt at-home COVID tests kits from sales tax.
We also checked several local Walgreens locations and found they are no longer adding sales tax to at-home COVID tests, but at one point they were. That is a fact.
Walgreens officials thanked News10NBC for bringing this to their attention, and say if a customer was mistakenly charged sales tax, like Morgan, they can request a refund from the state. The company does not keep the sales tax.
State officials say you can apply for a refund of the tax using Form AU-11.
Here’s the full statement from Walgreens:
Walgreens is committed to meeting the needs of our customers and patients and are doing all we can to support our communities during this critical time. Sales taxes are levied by state and/or local jurisdictions. Retailers are required to collect sales taxes from customers at the point of sale, on behalf of the jurisdiction, and remit the collected taxes to the state and/or local jurisdiction. Sales taxes are considered a "trust tax" and requires all taxes collected from customers to be remitted to the corresponding jurisdiction. Sales tax collected are not kept by the Company.
In general, the taxability of items (taxable or non-taxable) varies by jurisdiction. Taxability of items may change depending on guidance provided by jurisdictions, cases/rulings, or changes/updates in the law. With the urgency to get these new COVID at-home tests available in stores and being a new product with no taxability guidance issued from New York State, retailers were left to figure out taxability. As more information and guidance becomes available, we adjust our registers accordingly to be in compliance with the state and local laws. If a customer is mistakenly charged sales tax they can request a refund of the sales tax from the State.
– Karen May
Walgreens Leadership Communications Senior Manager