Earlier this month, a Pennsylvania consumer trying to buy a woman's shirt at Arhausjewels.com noticed the site had dutifully added $6.79 in state sales tax to the order. Problem is, clothing generally isn't taxable in Pennsylvania.
When the customer called to point out the error and ask that the sales tax be removed, the representative refused, saying the tax had been correctly assessed.
Just how many businesses may be improperly collecting sales tax or how widespread the problem may be isn't known, Pennsylvania Department of Revenue spokeswoman Elizabeth Brassell said.
But as more online retailers collect sales tax in the wake of the state revenue department's 2012 pronouncement that it would step up enforcement, instances where the tax is misapplied could grow.
In December, another Pennsylvania resident who had shopped online at Kohl's was surprised to learn in an email that she would be receiving a 42-cent refund for sales tax "mistakenly charged for your qualifying tax-free purchase."
"We're correcting this issue and you will see this credit from Kohl's reflected soon on the payment method you used for this purchase," the email from the Kohls.com Customer Service Team stated. "We're sorry for any inconvenience this has caused."
A spokeswoman for Wisconsin-based Kohl's this week declined to discuss the issue. Arhaus Jewels, an arm of the Walton Hills, Ohio-based Arhaus Furniture chain, did not respond to multiple requests for comment.
Sales tax compliance issues can arise because companies doing business in multiple states must contend with tax laws that differ widely. For example, while most clothing is exempt from the 6 percent Pennsylvania sales tax (and the 1 percent Allegheny County tax), clothing is taxable in Ohio and many other states.
Pennsylvania's sales tax structure also can be confusing. Formal wear, bathing suits and fur coats are notable exceptions to the no-tax-on-clothing rule, for instance. Jewelry, purses and wallets also are taxable.
And while most food and medicines are non-taxable in Pennsylvania, there are quirky exceptions. Contact lens wetting solution is non-taxable but contact lens cleaning solution is subject to tax, for example. Sunburn treatment isn't taxed, but sunscreen is. Candy and gum aren't taxed, but soft drinks are.
Many e-commerce businesses have long ignored a Pennsylvania law requiring them to collect sales tax if they have a physical presence in the state, such as a store, office or distribution center.
But since the state revenue department launched its e-commerce initiative in 2012 -- which included the warning that it would be cracking down on scofflaws -- some 100 retailers, including Amazon.com, have started adding sales tax to customers' online shopping bags, the department's Ms. Brassell said.
So far, the new collections have brought in some $70 million in sales tax revenue, she said.
Ms. Brassell said that if a retailer charges tax on a non-taxable item, the money likely ends up in Pennsylvania's general fund instead of the company's coffers.
"It's a violation of state law to represent that you are collecting sales tax and not remit it to the department," she said.
If a consumer notifies the department about a retailer overcharging on sales tax, the department will step in, she added. "We will educate [the business] about Pennsylvania's tax law," she said.
Consumers who are overcharged and are unsuccessful at getting their money back from a retailer may contact the revenue department's board of appeals to petition for a refund.
The contact number is 717-783-3664, or visit www.boardofappeals.state.pa.us.
Save any receipts showing the amount of sales tax in question.
For a list of taxable and non-taxable items in Pennsylvania go to www.revenue.state.pa.us and search for Retailers' Information Guide, or Rev-717.
Patricia Sabatini: firstname.lastname@example.org or 412-263-3066.