BJ’s explains confusion about sales tax

BUFFALO, N.Y. (WIVB) – Call 4 Action looked into claims this week that members of BJ’s Wholesale Club were paying too much on sales tax on some deeply discounted items.

The story caused quite a stir, and at the time, BJ’s offered no explanation. The difference between the sales tax on the discounted price versus the full retail price was significant, and it upset customers who worried they had been overcharged.

John Hacic bought a big screen TV at BJ’s for half price but paid the sales tax as if it was full retail price, and he was not alone.

“The sign did not say coupons, rebates, anything,” Hacic said. “And they said, everybody that was buying TVs the previous day when I was, was complaining about the same issue. They couldn’t do anything about it becuase it was set by their home office.”

BJ’s staff explained the “Black Friday Week instant specials” were actually in-store rebates saving members the trouble of sending off for the savings.

BJ’s manager Dave Teribury said, “We thought it was a win for our members, not to have  to wait for that period of time, and just to be able to get that ‘instant savings’ at the time of shopping.”

Tim Noonan, a tax lawyer at Hodgson Russ, points out that when bargains involve manufacturers paying the retailer the difference between full price and the discounted price, state law requires the retailer to charge the full sales tax – whether it is with a coupon, rebate, or “instant savings.”

“Sales tax is very confusing. People like me understand it, but the clerk at BJ’s might not,” Noonan said. “I could see how a customer could be confused. It does not explicitly say, ‘Hey we’re getting reimbursed.’ It just indicates that there is some trade funding here that is supporting this discount.”

But the bottom line, according to Teribury, is that all of the sales tax goes to the state. He says he has explained that to members.

“There’s no benefit for us to do this. New York State is getting the money. BJ’s is not getting the money, and when I talked to them about that, they understood, and they appreciated the conversation,” Teribury said.

If you believe you paid too much tax, you can file a complaint with the state tax department and they will review your case.

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