A Pennsylvania K-Mart levied an illegal $0.28 tax on Mary Bach’s $3.99 12-pack of Angel Soft toilet paper. Pennsylvania’s sales tax guide clearly states that toilet paper is a non-taxable item. Mary first spoke with a cashier after noticing the illegal charge. When K-Mart again charged her the tax on a second visit, she decided to sue.
A self-styled consumer advocate who heads AARP’s Pennsylvania consumer issues task force, she has been crusading against price scanner errors for nearly 25 years. Her efforts helped spur laws requiring scanner inspections by the state’s Bureau of Weights and Measures.
“Somebody has to draw attention the problems in the marketplace with these kinds of issues,” she said.
Most notably, she has taken on Wal-Mart, CVS and the now-defunct Hechinger over price scanning errors.
In the case of Wal-Mart, the giant retailer paid her $100 plus court costs in 2002 for charging sales tax on a pair of ballerina-style bedroom slippers. In court, Wal-Mart’s attorney argued that sales tax was appropriate because the slippers were classified as dancing shoes, she says. “It makes for a funny story.”
Besides her latest suit, she has hauled Kmart to court three other times for charging her a higher price on an item than promised in an advertisement or display. In all three cases, both sides showed up at the magistrate’s office but reached a settlement before arguments were heard, Mrs. Bach says.
Pennsylvania’s Unfair Trade Practices and Consumer Protection Law allows plaintiffs to sue either for the amount of damages, or $100 – whichever is greater. If K-Mart doesn’t want to settle, a District Judge will decide Mary’s case on Halloween.
Shopper sues Kmart in toilet tissue tax dispute [Pittsburgh Post-Gazette]
(Photo: d00d)
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@Cy Guy:
Wrong. The improperly collected sales taxes must be reported to the state agency on the weekly or monthly report, and taxes collected are taxes owed. The merchant never gets to keep any sales taxes which are mistakenly collected.
The merchant can avoid paying the taxes to the state agency IF the improper sales tax is refunded to the consumer, BUT only within the reporting period (weekly or monthly depending upon the size of the merchant and the particular state). At the end of the reporting period taxes collected are owed to the state agency.
After the taxes are paid to the state agency, the refund issued to the consumer is from the profit margins of the merchant.
As a general rule the state agency will not refund any excess taxes.
@doctor_cos:
Use Taxes are not just applicable to Ohio. Use Tax laws are applicable in any state that has consumer sales tax or merchant product taxes.
@RandoTheKing:
So if I make a mistake and grab the wrong box for a pair of shoes, should I be accused of shoplifting, or should I be allowed to pay the difference and go on about day?
And since she did report it to a manager, what else should she have done? And I would say they have a quality cashier there, anytime a cashier shrugs it off, you know nothing is being done about it.
“The first time was the afternoon of Sept. 13. She said she complained to the cashier, who “just kind of shrugged.” Because she was in a hurry, she left without pressing the matter.
Mrs. Bach says she decided to go back the next day to see if the store corrected the problem, but was charged sales tax again. She complained to a manager, but got no satisfaction.”
Also, I doubt she will lose, this is exactly the type of thing that the state intended the law to address. Bet you that the state looks into the tax collection of K-Mart throughout the state, as they should. Might have been cheaper to just change the price.
@RandoTheKing: Getting a drink when you didn’t order it is a mistake. Getting taxed on a non-taxable item is illegal. Regardless of where the line lays with you, the state government draws it quite clearly.
@Shadowfire: I don’t think illegal taxes are frivolous at all. The path to independence came about in part due to taxes, after all. If people get charged a few cents when they shouldn’t be people could well be getting charged a lot more in other cases when no taxes should be charged at all. I think she was right to sue, and I hope she wins. It’s not like they weren’t given a chance to change their ways before she sued.
@shor0814: Yeah, K-Mart hasn’t exactly done much to earn my business lately. I haven’t been there in years except once when I bought a 3-dollar miniature car that I’d looked everywhere else for…
@MystiMel: I worked in a grocery store in high school. If something rang up wrong, I’d grab another item from the shelf, run it up to the service counter, and have them change it. It’s not hard. The fact that KMart is screwing the public is the problem.
@cosby: Your dumb idea to refuse to allow that customer into the store is about the dumbest idea I’ve heard in a long time. Clearly, you’ve never owned a business. Businesses depend on customers. Banning them for expecting accurate pricing is not the solution. Clearly, KMart has poor management. They don’t learn, and they need to be taught a lesson. Banning a customer would likely lead to another lawsuit, and I doubt a jury would find for Kmart. It might be time for you to find somewhere else to share your brilliant ideas.
Oh gee willikers, doesn’t this woman have anything better to do than complain about 29 cents. Sheesh. K-Mart was doing her a favor by charging that extra 29 cents because then they could keep it and use it to stay in business and pay their CEO loads of cash.
These rants about businesses ripping off the consumers are insulting to every working person in the world.
Businesses are only as good as their staff. Walk into any store and you ware looking eye to eye with the store staff. What do you see? For most part you will see hard working, honest people trying to do as good as they can as fast as they can.
When mistakes happen, it is that 70 year old retire with a leg missing from his visit to Korea that made the mistake. I think he has earned the right to make a few mistakes. But if you disagree then please go right ahead and tell him. He gave his leg so you have the right to speak your mind. Maybe the mistake will be made by the 30ish women over there behind the counter. She is divorced with 3 kids. God only knows were the bum of husband is, and of course there are no child support checks that arrive to help at home. Go scream at her and tell her what a f–kup she is for overcharging you $0.25 on your box of Wheaties. She has heard worse from the exhusband and has the scares to prove it. Oh, I know who did it. That 18 year old, wet behind the ears checkout girl who is so eager to help and do a good job that she will work overtime with out complaining, even if working overtime will cause her to miss her college class. She wants to be a teacher one day. She keeps missing classes she may never reach her goal. I am sure she intentionally mispriced an entire flat of canned peaches just to rip you off. Of course the mistake could be made in the office. Bob works back there. Never met Bob? That is ok. That is how Bob likes it. Bob was a fireman. One day he didn’t make it out of a burning building in time. The workmans comp insurance provided job training and with a lot of therapy Bob can now type with two fingers. He lost the other fingers in the fire. Go ahead, tell Bob he screwed up. He is just so happy to be here that he will smile and say thankyou.
I know, I am being melodramatic. Except each one of use can relate to somebody that I just listed. Hard working, honest people that would never intentionally harm you. Yet the posts on this board read like a great conspiracy where every employee of every business have but one goal of trying to rip you off.
Think it is the businesses that are “ripping you off”. Wrong. It is the employees. Businesses are only as good as their employees. And most employees are good, or at least they try to be good.
This is my last post. I hope one day people growup and realize that they are complaining about themselves.
@StevieD: Businesses are only as good as their employees, but it’s the management that chooses and trains the employees. When management selects inempt employees who are willing to work for minimum wage, then management should pay the price for the ineptness exhibited by the employees.
I find it highly amusing that the blame-the-consumer crowd, usually the ones screaming about the unfairness of taxes in general (but demand expensive gov’t programs in the same breath) are arguing that stores should be allowed to keep an illegal tax. Guys: cake (eating) and cake (having) – choose ONE!
“Banning a customer would likely lead to another lawsuit”
Stores are private property. They can ban whomever they want as long as its not for a reason that violates civil rights laws.
@StevieD: Actually, it is the fault of the scanning co-ordinator, or someone else in the scanning department. I don’t know who they are, or what their home life is like, but they got the job of scanning, they kind of accepted the task. I guess we shouldn’t hold people responsible for their jobs?
Suppose “Bob” was it? Well, Bob was drinking the day he was supposed to be on duty. He showed up to the fire you described drunk, and in addition to himself getting hurt, two civilians died as well as a father of 3 who doesn’t have a wife. I guess we can’t get mad at Bob. I mean, just because he didn’t do the job he accepted and was PAID for, and people died, it’s ok. I mean a fire department is only as good as it’s fire fighters, and I guess we shouldn’t hold public servants to any kind of standards.
Now as a person who WAS a asst. Scanning co-ordinator, I can tell you the we regularly were supposed to wander the store, do random checks and verify any complaints we received. AND, since we had a job in which knowing what items should be taxed, we had a cursory knowledge, AND a list provided BY the state as to what is or isn’t. I wish I knew then that I didn’t have to worry because I shouldn’t have been expected to do the job I got a check for.
This doesn’t surprise me at all. Before I wised up and stopped shopping at K-Mart, I noticed all sorts of discrepancies on my receipt, to the point where I started making sure to note prices of more expensive items and to check my receipt before leaving the store. It seemed like at least 10% of whatever I bought was more expensive at the register than in the aisle, and frequently the sales tax collected was a higher rate than the state specified, up to a half percent. I figured it was a regular scam on their part, and anytime I walked into the store and saw a line at the service desk (from everyone else getting a refund for the bogus overcharges, I figure) I just turned around and left the store.
Now I prefer Wal-Mart, where at least they now seem to notify you on the shelf that they’re charging a higher price than what they did last week (thanks for the photos, Consumerist!).
I always wonder how often “consumer activists” have actually worked in a retail or sales job.
@shawnj: Does it matter, though? Would her having done a year (give or take) in high school as a cashier or similar type job (like any sort of cinema or basic sales job) make a distinct difference in how she was brushed off by both a cashier and manager for reporting their company’s (rather serious, when one considers the thousands of people potentially purchasing mis-taxed items at K-mart in her state) mistake? Perhaps she would have felt more compassion for the cashier, knowing that the kid could likely not do anything–but who is to say that she doesn’t already feel that compassion?
I sincerely doubt her goal is to make the staffs’ lives more difficult. Her goal is to guarentee fairness for all consumers, and that’s something everyone theoretically should appreciate. Even if one DOES work retail, one is also still a consumer–and in a place like K-mart, quite possibly a consumer in the very place of their employment. A ruling against K-mart is both very likely and will help everyone who shops there, not just the activist.
Stevied;
You were most definitely being melodramatic.
Why would you assume it will be the handicapped, abused, or young that will make the mistake.
I’ve worked with enough people to know that the F-ups aren’t all disadvantaged people.
I work in a service type of job. I am held accountable if I don’t do my job correctly.
I have worked retail, and was held accountable to do that job correctly.
If someone is willing to accept a paycheck, they are also accepting responsibility to do that job correctly.
You are correct that a business is only as good as it’s employees. But you are naive if you don’t think that there are businesses out there that are only concerned with taking every penny they can from customers.
I’m not saying K-mart is inherently bad, or any worse than any other retail chian. I just don’t understand the attitude that would make it the customers responsibility to make them change a price on an item.
it would be the kind, caring, thoughtful, hard working, never do wrong employees you wrote about that are responsible for that, not the customer.
If two finger Bob, hiding in the back doesn’t do his job, it’s his fault, not the customer.
The customer doesn’t work FOR the store. Bob does. If Bob doesn’t care enough to do his job, why should we (the customers) be forced to pay more?
If good ol’ Bob CAN’T do the job move him to an area that won’t result in me being illegally charged tax on non-taxable items.
A business is only as good as it’s employees, and it’s not the customer’s responsibility to make sure that the business hires good, honest people actually capable of doing the job assigned them.
@StevieD: Ahhh, “Use Tax” laws.
I buy something in another state that is not taxed in that state, and bring it back home to my state, and I should pay my state the equivalent tax for WHAT, exactly?
The ‘privelege’ of living there (which they already tax me for in many other ways)?
What grand assumption is this?
If I live in say, Philly and drive to Delaware (no sales tax) and buy my big TV, and drive it home to Philly, now I should pay the commonwealth because the TV (I PAID FOR) is in their state?
Screw the “it’s the law” and explain this to me without legalese bovine excrement.
@doctor_cos: It’s very simple. The state (or commonwealth, in your case) REALLY wants your money. You found a way to get what you wanted without paying them. That makes them sad. How will they pay for all their sick time and vacation time (usually 1/2 of a day each for every two weeks, if I remember the rule in Philly correctly)?
In a nutshell, they just want the money.
But actually, the use tax provision is more of an instrument of torture for businesses than it is for consumers. It is much easier for them to audit companies and nick them for unpaid use tax when they perform a sales tax audit. And trust me… they ALWAYS find something!
You see, there are just as many times when a retailer fails to collect sales tax on something taxable as when they collect tax on something non-taxable. Of course, the high-minded consumer watchdogs rarely bother to point out those errors…
I can hear the chorus already: “That’s not their job!”
@Husker-fan:
Failing to report it to the appropriate contact still leaves the ball in your court.
If you walk into HP’s main offices and leave your complaint with the janitor, don’t expect to see your PC fixed.
If you walk into ANY retail store and leave your complaint with the cashier (who, for the record, is the lowest man on the totem pole of a retail store), don’t expect the complaint to be answered.
First of all, the cashier doesn’t give a rat’s ass about you or your problem, because the cashier is not making enough money TO care. They aren’t paid to care – it isn’t in their job description.
Second, frequently at larger chains, the store employees do not have the power to change things like taxable/non-taxable status. Giving them the power leaves the company wide-open for all kinds of internal theft. Telling them that it would help to hand out that access is pointless, much like someone suggesting to you that the way to ensure that you won’t wreck your car is to take all the wheels off.
Finally, why in the hell is toilet paper a non-taxable item in PA? I don’t pay money into the federal coffers so that you people can get a bunch of tax-free items at the state level.
Same problem I see with property taxes. A few nice, rich spots across the country have ridiculously low taxes, causing the rest of us to pay more. Just stop it already.
@ColdNorth:
‘You see, there are just as many times when a retailer fails to collect sales tax on something taxable as when they collect tax on something non-taxable. Of course, the high-minded consumer watchdogs rarely bother to point out those errors…
I can hear the chorus already: “That’s not their job!”‘
QFT.
When the error is in the company’s favor, they’re a giant and the consumer is Don Quixote, heroically listing at windmills.
When the error is in the consumer’s favor, the consumer suddenly turns into Sancho and runs out the door.
People could at least not be quite so blatantly hypocritical.
@RvLeshrac: The issue is resolved by identifying who is in the better position to prevent the error: the company or the customer.
It is not hypocritical to suggest that the company, which sets the prices, charges the customer and pays the sales tax, should bear the burden to do it correctly. Thus, if the mistake is to the customer’s benefit then the retailer should not be heard to complain. I don’t understand how the customer can be at fault when she walks in off the street and has no control over the correct pricing and taxing of goods.
Our society (and the law) routinely place the burden of making errors on the party in the best position to prevent, detect and correct the error. Rarely does that burden fall on the customer. Especially in the area of collecting sales tax, the retailer operates at its own peril. It is part of the price of doing business and part part of the retailer’s responsibility to treat customers fairly.
In Mass., sales tax is charged after all coupons (store and manufacturer) are deducted. After a register mistake, I’ve had store managers reading the fine print on the coupon back to me “Customer responsible for tax.” Thanks for the information, man.
It’s usually not worth the effort, but it would be nice if the stores understood the basics of sales tax beyond letting the computer be in charge of the store.
@ColdNorth: “It’s very simple. The state (or commonwealth, in your case) REALLY wants your money.”
That clears it up, thanks
How bout we just get rid of these stupid rules and charge a 4% sales tax on EVERYTHING? Any physical good you buy, any transaction that is done INSTATE is charged. State governments have no jurisdiction over interstate commerce (that’s the Feds’ job) therefore they can’t charge jack shit for interstate purchases.
some people will sue over anything, this person included
@MystiMel: Perhaps, but the fact that the store was notified and failed to fix the error makes her lawsuit valid. The employee, or the store, “not having time” to fix an illegal levy just makes it willful. They were told, so they knew. Nothing changed. So they were knowingly taxing people illegally. I would hope that this would make the penalty higher.
@RvLeshrac: If an illegal activity is reported to a business’ employee, that employee has a responsibility to report the problem to his or her superiors. The business was informed, now that ball is in THEIR court to change their illegal behavior.
@SCORPIONX: And does that fact make a lawsuit over illegal taxation any less valid?
@Buran:
This is the problem with the current company/customer relationship. Too many customers become all self-righteous about a company’s mistake. It’s a mistake. That is all. It isn’t some wide conspiracy to make an extra few cents off of toilet paper. Instead of everyone getting their undies in a bunch, realize that this is something for the manager to address. I am sure we have all been in situations where we made honest mistakes, and some jerk decides to make a federal case out of it, instead of just notifying us. And no, the cashier isn’t the proper contact.
I have a computer company in California and one of my customers grows and sells produce.
The labels they put on the food packages, along with the thermal ribbons they use to print the labels are tax exempt. The printer, and printer parts (printheads, etc) they print the labels with ARE taxable.
If I go into a restaurant and eat the food there, it’s taxable. If I take it out, it’s not taxable… unless it’s hot, then it’s taxable. So… cold roast beef sandwhich from a deli: not taxable; hot reuben: taxable. Cold french fries? Probably taxable even though their cold. Warm potato salad: probably not taxable but the toilet paper you’ll use when it gives you the shits IS taxable in California.
They MADE A MISTAKE. If you don’t like it then don’t buy toilet paper. How about you just use K-Mart’s newspaper ads instead? (Don’t know if newspapers are taxable)
The flow of sales tax receipts is my single favorite subject in consumer law.
Once and for all, could you please, Consumerist, look into how corporations redeem sales tax money to the states? Millions of dollars per year are at stake.
Is it the case that a company simply must declare to the state the amount of taxes collected, or is it the case they declare to the state how much they have sold in taxable goods (much like we individuals declare our non-exempt income to the IRS). The difference is crucial.
If it is the former, no problem. But I’ll bet anything that in many states, it is the latter. The significance? We pay tax on all coupon discounts and rebates in most stores that offer/accept them.
Example: State has 10% sales tax. I buy a widget priced at $1. I have a coupon that gives me 50% off. I actually remit 50 cents to the store (this would be the taxable revenue reported if my theory is correct). HOWEVER, instead of paying five cents in tax, I am made to pay 10 cents (doubling the effective tax rate). What really happens to that extra nickel in tax that I paid? Is it a straight pass-through to the state?
I say the store correctly/truthfully declares that I paid only 50 cents and dutifully pays the state 10% of that, or 5 cents. They then wrongfully keep the “extra” nickel. This adds up to millions, folks.
I have to wonder if this person only states the problem to the cashier because she knows they can not do anything.
That way when the problem is not fixed she can sue and get $100.
I have to side with the store on this one. If she complained to management and nothing was done, then I would have to side with her. But ast it stands, she is just looking for easy money.
This kind of error is probably quite common, but most people (myself included) don’t know the sales tax laws well enough to notice it. What’s pathetic is that K-Mart doesn’t say oops, you’re right, thanks for pointing it out.
the same goes with a lot of Food Stamp purchases. I’ve seen a lot of people pay tax while they are not supposed to pay taxes. I wonder if they can be taken to court as well.
@humphrmi: I would love to see you waiting in line behind the person that demanded the cashier call a manager over because she got taxed on toilet paper that should not be taxed.
I’m sure you’d wait their patiently until the issue was resolved to everone’s satisfaction.
(Doesn’t mean I’m on the store’s side, just that you’re being pretty unrealistic here.)
@Jay Levitt: And that’s when she goes to the government and they add “retaliation against a whistleblower” or similar appropriate charges — you cannot expect to act against someone who is trying to report illegal behavior and get off without being punished for that
Man, I thought K-Mart wasn’t even around anymore
@sonichghog:
She DID notify the manager, the second time. Read the article for clarification.
i have to wonder why they didn’t just perform and exchange – return the toilet paper and have the new merchandise be the same toilet paper, this time tax free. she gets her few cents back and it took one minute to complete.
here in MN all clothing is tax-free. i manage a popular accessories store and we have a few more obscure items that fall under “clothing”. however even by the best of employees this is easy to miss when it must be manually entered. we just do the simple exchange i mentioned earlier and customers are very pleased and satisfied that we took care of it so simply.
Ok hold on let me get the jist. A woman is sueing K Mart for 28 cents. Twenty eight cents. Wow some people really go too far, don’t they.
Fair enough for illegal taxes but COME ON. Sueing over twenty eight freaking cents!
She won the lawsuit. Kmart hired a law firm and she represented herself. She was awarded $100 dollars. Good for her.
The woman was not suing over .$28. The woman is attempting to hold corporations accountable for illegal behavior to the benefit of us all. I don’t see how this is difficult to understand. Multiply her $.28 by the hundreds, perhaps thousands, of transactions that she has now helped K-mart correct and you can start to see how this adds up for consumers. In addition, her lawsuit is not even about this particular toilet paper transaction; she is attempting to call attention to the myriad ways in which companies break tax law, either intentionally or not.