NYS Exposed: Are you being overcharged on sales tax?

July 18, 2018 03:58 PM

We’re not wishing the summer away, but soon back-to-school shopping will commence and a News10NBC investigation has uncovered that there’s a good possibility you may end up paying more in sales tax than you should.

Clothing and/or shoes that are purchased for less than $110 per item, should not be charged state sales tax at all, any time during the year but News10NBC has found that a lot of people don’t know that and some stores don’t either.


Dawn Lunt likes to spoil her daughters and grandson so she does a lot of shopping locally.

Lunt knows that New York State waives its four-percent sales tax on clothing and shoes under $110, so she’s used to just getting charged the four-percent county tax on those purchases.

But after a recent trip to a store in Greece Ridge Mall, “that was when I realized, I just paid eight-percent sales tax and I don't think I should have. Did I go back? No, it was just $26 worth of something so it wasn't a whole big deal but again if this is happening to a bunch of people and you start adding it up, that comes out to a lot of money that the state is getting unnecessarily,” she says.

The store collected 4-percent on behalf of the state when it shouldn’t have.

“This is New York State, we really don't need to pay any more taxes than we already pay,” Lunt wonders.

News10NBC wanted to see just how big of an issue this was so, Investigative Reporter Jennifer Lewke went shopping. She hit up big chains and small mom and pop stores at Greece Ridge.  

Of the nine stores where purchases were made, three charged state sales tax on purchases that should have been exempt.

The stores that overcharged were small and locally-owned. One was a sports memorabilia shop that had a mix of clothing and other merchandise that would be subject to the state sales tax.  

“The sales tax system in New York State is rooted in complication…there are a lot of variables that can be really confusing, particularly, I think to a small business that just thinks, well....  'I'm selling something, I'm a sales tax vendor, I have to collect the sales tax on it or I'm going to get in trouble' so they tend to err on the side of caution,” says Ted Potrikus, the President of the New York State Retail Council.  

The New York State Department of Taxation and Finance itemizes the products that should be exempt and the list is pages long so, for stores that don’t have high-tech software, you can understand how mistakes can be made.

In almost all cases, the stores aren’t keeping the extra tax money, the state is.  

A spokesman for the Department of Taxation and Finance says those who are overcharged can submit their receipt along with an AU-11  form for a refund here.

But it has to be done through the mail and because the amounts are normally very small, very few people actually do it.  In fact, last year, New York State refunded less than $100 to people who were overcharged, “I think there's a whole lot of people that probably have no idea,” Lunt says.

That’s why it’s important for shoppers to pay attention at the register.

If you’re buying clothes, shoes, hats, anything on this list and it’s under $110 per item, you should not be charged the four-percent state sales tax, you should only pay four-percent in county sales tax.

If you can catch an error at the register, you can get your money back on the spot.

If you miss it, don't let the state keep your cash, even if it's only a few bucks.


Jennifer Lewke

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