Letter from Costco Tax Dept

[John105]

Have to admit when I saw it coming on the USPS informed delivery email, I was quite curious what it could be about.

There was a $10 shop card inside and the letter states it’s to cover the cost of sales taxes charged on the discount amount for lightbulbs purchased in NJ, and any inconvenience this may have caused.

I have a vague idea what is meant. If lightbulbs were $10, but the net sale was $2 with discounts, apparently they charged sales tax on the $10, not the $2. LED light bulbs are crazy cheap
in NJ. A set for the chandelier was like $2.xx, with 6 filament bulbs. They’re always marked down like that.

I will try not to spend the entire $10 on hot dogs and Pepsi.

 

[JWC86]

I will try not to spend the entire $10 on hot dogs and Pepsi.

Don't make a promise you cant keep!

 

[Jdeere562]

Too funny! Take the $10 card and go spend it there. 2 precooked chickens, or hotdog lunch for a family of 4!

 

[captainbeandip]

Actually, the light bulbs might be tax exempt in your area, and maybe they weren't supposed to charge any sales tax.

That's how it is in MN where I live. When CFLs were a new thing they wanted an incentive to get people to buy those instead of the much cheaper incandescents, so they made higher efficient light bulbs tax free.

I remember when this law was passed in my area (probably about 25 years ago) and I was reading about it in the newspaper. I had just bought some of these fancy new twisty bulbs from the Depot, and I looked at my receipt and saw that they charged me sales tax.

I was pissed, so I stormed back into the depot and demanded my 26 cents back (or whatever it was that they owed me). Ha ha, I sure showed them!

(How did you get $10 and I only got 26 cents though).

 

[John105]

I believe the $10 is somehow matched to past purchases--that appears to imply being overcharged on $150 of what was discounted. Using my above example, that's almost 20 purchases, if each purchase were discounted about $8. I am guessing that's a bit on the high side, but maybe they ran a query to say if you bought 1-10, 11-20, 21-30, etc., maybe those are $5 increments of a refund/cash card. I'm sure there was some calculation made, and that it's being proactive ahead of a lawsuit or something.

I've actually seen miscalculations throughout the years. For example, I live in PA. We shop in PA, NJ, DE, routinely.

NJ has a higher sales tax, DE has no sales tax.

Not recently, but 15+ years ago, I have purchased in DE and returned in PA and NJ. Back then, I would see the sales tax for the respective states refunded. That's bad because PA and NJ never collected what's being refunded, in the first place. Have not seen this happen in years. I wasn't do it to beat the system, rather out of convenience.

When I googled this weekend, I also seem to have come across an issue where Costco taxed USPS postage stamps--that's gonna pose a huge problem.

Amazon once taxed me for their brand toilet paper which is not taxable in PA--they credited me. The Tabasco co. once charged me sales tax on hot sauce, when food is not taxable in PA, only prepared foods. They wouldn't credit me so I simply disputed the sales tax only portion of the charges, and my CC issued a credit.

One would think a national database is for sale and cos. should use them. I would think errors occur because the cos. handle it themselves. But as mentioned, I wish we could all go back to a time before SD v. Wayfair. I don't believe it was the correct decision, and it was in fact close.

 

[Hillbilly Deluxe]

How much do you think it cost Costco to send that out?


This country is about to regulate ourselves into oblivion

 

[eljefino]

Maine gets weird with sales tax, they want the whole nut if there's an "instant rebate" or coupon. They also charge it on an auto part core charge, but won't refund it.

$70 starter, $30 core, that'll be $105.50 with (5.5%) tax please.

Return the core? Here's your $30 back.

 

[John105]

Free or discounted phones, are routinely taxed at full retail. I recall seeing at work, free phones in CA, having $23 sales tax, when these were cheap $300 phones, being given to us free, meaning $0 cost, with a plan. imho an outfit has to be big like Costco, for a state taxing authority to go after. They're not interested in the local five and dime.

 

[SHOZ]

Illinois has a 6.5% base rate for sales tax then towns of certain size, and counties can add their own taxes. So 10% is the highest in the state. When eBay started charging sales tax if you lived in Illinois they charged me the max rate, should have been 7.5%,

They have since refined that to get the correct rate.

 

[JimPghPA]

Go for the parlay, by $10 worth of light bulbs and see if they give you several more $10 gift cards. Just kidding.