Based on the quote provided, it seems that you could spend $1000 on diapers without issue.

The $110 dollar limit is per item or per pair. (presumably so that if you buy $200 jeans, you don't qualify for the 0% tax). The receipt total should be irrelevant.

Am I missing something?

What would her recourse be? How could she go about getting this fixed, since CVS is inept when it comes to tax code.

@pervy_the_clown: Seems to me she would contact the New York State Department of
Taxation and Finance.

[www.tax.state.ny.us]

Also, you are not allowed to have an awesome name like Pervy-the-clown without a photo or at least an avator. Please fix this pronto!

@pervy_the_clown: Contact the AG's office, most likely. They'd be more than a little interested in it if a major retailer in NY is cheating on their taxes.

If the tax is paid to the government by the business and the business simply passes the cost of the tax on to the consumer, couldn't the business simply increase the list price of the item to adjust the tax they have to pay to sell it to a reasonable balance, then simply not itemize the sales tax on the receipt? That would have dual advantages of not giving the consumer the chance to complain about being charged a sales tax on a non-taxed item (since they're only dealing with a list price at that point) and giving them a pleasant what-you-see-is-what-you-pay shopping experience. Am I mistaken?

The amount of tax she was charged is definitely wrong. The combined state and local sales and use tax rate in New York City is 8.875%. This rate includes:

- the 4% state tax
- the 0.375% Metropolitan Commuter Transportation District (MCTD) tax
- the 4.5% New York City local tax.

The only way for her to be charged 4.875% tax is a combination of the MCTD tax and the city tax, but not the state tax.

Since she wrote in and told the CVS clerks, continued charging of this tax is deceptive and she can sue in Small Claims court under NY State's General Business Law § 349.

Section 349 (a) states, "Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful."

Section 349 (f) states:

"any person who has been injured by reason of any violation of this section may bring an action in his own name to enjoin such unlawful act or practice, an action to recover his actual damages or fifty dollars, whichever is greater, or both such actions. The court may, in its discretion, increase the award of damages to an amount not to exceed three times the actual damages up to one thousand dollars, if the court finds the defendant willfully or knowingly violated this section. The court may award reasonable attorney's fees to a prevailing plaintiff."

@SkokieGuy: Good point, you're right. I read it and for some reason thought it meant per purchase.

Diapers are not "clothing" any more than maxi-pads are "clothing." They are absorbant pharmacy dispensed items for containing bodily fluids. They are not fashion items.

Perhaps we should tax disposable diapers as convenience items, like prepared foods, and not tax cloth diapers. I'm sure some will disagree.

@Julia789: Are you dense? The tax guidelines consider diapers clothing. The end.

[www.tax.state.ny.us]

Page 5 lists the exempt items. Please note: "Diapers (children - including disposable)

@corkdork: If you're incorrectly charged tax on a non-taxable item, you need to send a form to the state for a refund from the state. At least in the case of a major retailer such as CVS, their system charges tax, it gets paid to the state.

@katstermonster: I should add that yes, these are old guidelines. The exemption RULES have changed, but not the exempt ITEMS.

@Julia789: Diapers are underwear for people who cannot use the toilet; therefore, clothing.

@WraithSama: When I was in Japan recently, a lot of stores had two numbers on each price tag: the price before tax was applied, and the price with tax. The resulting what-you-see-is-what-you-pay shopping experience was, indeed, quite pleasant.

Found a list of clothing items that are exempt for new york [www.tax.state.ny.us] (PDF) this is however from 2006 and since the new law did not include a list. I'd assume that the list still applies.

@Julia789: Clearly you've never been to Burning Man.

@spazztastic: Exactly, which is why adult diapers are included, too. There are some straaaaange things on that list, though...

@Julia789: I don't consider granny panties fashion items either, but that doesn't mean they're not clothing.

@Mknzybsofh: I posted on this above...the list still applies, but the exemption rules (cost requirements) have changed slightly. Diapers are still exempt.

@TCama: From what I understand that sounds correct

@corkdork: Just a hypothetical but would said AG's office be interested if that major NY retailer was cheating on their taxes in a way that dumped more tax money into NY's system (charging taxes when taxes shouldn't have been charged)?

agb2000 has it correct. There are several levels of sales tax in New York State. There is a town/county level and a New York State level. New York State lifted their portion a while back for certain clothing under $110. The town/county government has the option to lift or not lift their portion.

In my county we pay 4% state and 4.75% county sales tax. On certain clothing items less than $110 the 4% is lifted but we still have to pay the 4.75% part. Only at certain times of the year, like back-to-school time will the county consider lifting the tax for one week or so.

Don't lawyer up: attorney general up!

@katstermonster: Yeah I noticed it after I had added this post. I had spent a bit of time looking for it. So I had not seen your post.

@spazztastic: And that form would be AU-11 [www.tax.state.ny.us]

@Mknzybsofh: I hear ya. Does that list not have some of the strangest things you've ever seen??? I honestly don't know if I'd even notice whether those things are taxed or not if I bought them. So weird.

@WraithSama: If all retailers were to show the actual price of everything they sold, consumers would have a much easier time to make a buying decision. It would end the MADNESS of shopping for hotel, air travel, car rental and all sorts of other items/services where retailers obscure the real cost with hidden taxes, fees, service charges and all. Have you looked at your telephone/cell bill? Oh! My! God! A tax for this, a charge for that, a discount for this, a credit for that. Truly obscene!

@prag: That is a completely different argument that doesn't even apply to the article. The main thing is that disposable diapers are exempt from sales tax according to the NY tax codes, yet she was charged anyway.

Minnesota has a similar exemption on clothing and shoes. Other baby care products including bottles, pacifiers, and breast pumps are also exempt in Minnesota. (Interestingly enough, belt buckles sold separately are NOT exempt...)

@katstermonster: I realize they are considered clothes, I just find it annoying they are listed as such because I consider them the same as feminine products, etc.

@BumpinUgglas: Ha ha too funny!

It seems as if small claims court is one possible route for reimbursement - I might go that route and simultaneously report them to the government (but not try to get my money back from both).

I would use small claims court to make CVS deal with their screwup and not make the government deal with it after the fact - they did everything they were supposed to, so why should the mistake be their responsibility?

Alert Andrew Cuomo!

@Julia789: They're not...people who use feminine products can wear underwear (and do). People who wear diapers do so as an alternative to underwear, which is clothing. I think feminine products should be tax-free, but that's another story.

@spazztastic: So does that mean that when CVS is charging the tax, it's automatically getting transferred to the state? They're not just pocketing it?

@WraithSama: You're being way too logical. Businesses want the lowest price on the tag as you're more likely to buy something with a price tag of $100 versus the actual cost with tax of $109 (hypothetical 9% tax). Hotels, cell phone companies, and air lines would be the most against telling you upfront what the price will be, as taxes and fees could add anywhere from 20%-75% to your actual total.

@coren: If you go to small claims court you would only be able to get the amount you are overcharged, so you'd end up spending a day in court (and likely missing work and having to pay for a babysitter) over roughly $3. I understand it's the principle but it wouldn't be worth it.

@coren: You'ld have to be overcharged on an awful lot of diapers to make up just the filing fee for small claims court... or were you suggesting this out of principle?

Diapers are not clothing. I don't care what the New York legislature says.

I wonder why there aren't more stores online who help to fill this need. There's 1-800-Pet-Med, and 1-800-Contact, yet no 1-800-Diapers?

It just seems so weird, especially when people seem to only be having MORE babies.

I feel sorry for the whole tax shenanigans in this story. I find myself driving a little extra for big purchase just to pay less/no tax and I wonder if states realize how much they lose in commerce for stores by trying to nickel and dime people at the registers.

@corkdork:

They're not cheating on their taxes. They're collecting more tax than they're supposed to on behalf of the government. The government gets more money.

@mmmsoap:

At the large retailer I used to work for, yes - every dollar that was collected as sales tax went to the state.

@agb2000: If I had to guess, I'd say she meant "on top of the state tax."

@mmmsoap:

That's exactly what it means.

@WraithSama:

Most states require that you disclose the tax you charged.

@fantomesq: Mostly out of principle, yeah. I mean you could also recover the court costs from them, but that might be excessive.

@ncpeters: I'm not sure if it's a state by state thing but I always understood you could also recover costs (court filing would likely fall under that, perhaps a sitter, perhaps not).

I just think the only way they're going to learn is if someone hits them in the checkbook, even in little bits.

@the Goat: Are you also saying that it's okay that she was charged tax for a non-taxable item? Seems to me it's a bad precedent for a company to fail to observe the relevant laws when taking money from customers.

@justbychance: Yeah Ive been known to buy something in Oregon if the price difference is going to be more than a tank of gas (so game consoles, large electronics). Plus it's fun to just make a day of visiting Portland, so it's always worth it.

Doesn't the NYC tax code only say that the diapers are exempt from the 4% city tax? That means that they would still be responsible for paying the other 4 7/8% tax, which is exactly what happened. While the CVS agent may have misstated the reasoning, the customer would still be liable for the 4.875% tax.

@Mknzybsofh: Personal flotation devices are taxable... What about a diaper that acts as a flotation device? I guess it is up there with a cat with butter on its back.