CPA catches book chain sales tax mistake

January 16, 2009

Do you sometimes think your accountant is a wee bit obsessive about everything tax? Well, how does he or she compare to Fred Miller?

Miller, a Kalamazoo, MI, certified public accountant, was surprised when the clerk at the Portage, MI, Barnes & Noble rang up a 6 percent state sales tax on his purchase of Money magazine. The reason for his shock: The tax shouldn't have been levied.

"I'm a CPA and it was absolutely news to me," Miller told the Kalamazoo Gazette. "I've bought
it (the magazine) at some other places and I've not been charged sales
tax."

Michigan officials agree with Miller.

Michigan Treasury spokesman Terry Stanton told the Gazette that any
publication that qualifies for periodical postage, a lower postage rate
charged for delivering magazines and newspapers, is exempt from sales
tax.

The store manager told the newspaper that before "the holidays" B&N officials told them that laws were changing and that the store
was supposed to begin charging sales tax on periodicals. A spokeswoman for the company said she was looking into the issue.

It's unclear what might happen to the erroneously collected sales tax amounts or the retailer that improperly
collected the tax.

And what about the CPA who discovered the incorrect tax charge?

"The issue isn't the sales tax I paid," Miller told the Gazette. "The issue is I'd like to know what's going on so they're doing it right."

Sales tax token image courtesy Pennylicious

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Comments

Mark

18 years ago Reply

Recently I purchased an AT&T $50 prepaid phone card for my Grandpa at Fry’s Food (Kroger) and was charged sales tax. I demanded either a full refund or a refund on the sales tax. At first, Fry’s customer service was not going to give me either. I told them that I would not leave until this issue was resolved and they finally got an assistant manager to help and refund the sales tax (under food) just to get me off their backs.
I files a complaint to the State of AZ and with Kroger.
I was lucky and persistent.
Taxrascal

18 years ago Reply

6% of all magazine sales at B&N, even for just a few weeks, is a whole lot of money. I’m also curious about where it all ended up.

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CPA catches book chain sales tax mistake

Mark

Taxrascal