Next time you step up to the register with a fist full of coupons, you might want to double-check your receipt. You could be getting ripped off.

		Online graphic See a graphic showing how sales tax cuts into coupon savings, as well as a list of what's subject to state sales tax. More information Pennsylvania residents can request a sales tax refund from the state Revenue Department by filing an appeal online at www.revenue.state.pa.us or by completing paper form Rev-65, which can be downloaded from the site.

Under Pennsylvania law, consumers who use coupons on taxable goods are entitled to a bit of a tax break. They owe sales tax based on the item's price after the coupon is deducted.

A shopper in Allegheny County buying a $5 box of detergent, for instance, would pay sales tax of 35 cents (which includes 6 percent state tax and 1 percent county tax). A customer buying the same item with a $2-off coupon should owe sales tax of 21 cents.

The concept may sound simple, but there's a caveat. According to the Pennsylvania Department of Revenue, it's up to retailers to cooperate by keeping adequate records. If they don't, customers must pay the higher tax. And while the state says the record-keeping task is easy, some stores disagree.

A spot check of some of the biggest retailers in the area that handle lots of coupons -- Wal-Mart, Target, Giant Eagle, Shop 'n Save and Eckerd -- found three out of five are not extending the tax break to their customers.

Both Target and Eckerd give their customers the tax discount.

But two of the area's largest grocers, Giant Eagle and Shop 'n Save, and the nation's largest retailer, Wal-Mart, do not.

Because of the stores' varying policies, customers can end up being taxed different amounts on the same item, depending on where they shop.

The amount at stake for consumers is relatively small when looking at a single shopping trip, particularly considering that most food and clothing items aren't taxable. But the tab of lost savings adds up when taking into account multiple trips by thousands of coupon-clipping customers buying thousands of items.

The state allows stores to give coupon customers the sales tax discount if the store specifically links the coupon to the item. Stores can comply by describing the coupon on the register receipt (a Windex coupon must say "Windex," not simply "manufacturer's coupon," for example) or by providing sufficient documentation "behind the scenes" in electronic data audited by the state, according to Steve Kniley, spokesman for the revenue department.

The department, which also collects Allegheny County's 1 percent sales tax, requires detailed information so that auditors know for sure that the coupon being used is for a taxable item.

"If a customer is buying 20 items, some taxable and some not, and the receipt just says 'coupon,' we can't tell" what the coupon is for, Kniley said.

With today's sophisticated computers, meeting the state's requirements is not a tough job, he said.

"This really is not that complicated. Some of these stores may make it look complicated. But it can be done. Stores do it all the time," he said, mentioning Giant food stores in Harrisburg, which aren't affiliated with Giant Eagle.

Kniley said he didn't know how many retailers statewide calculate sales tax based on the lower, after-coupon price.

Giant Eagle spokesman Rob Borella said the O'Hara-based chain would like to charge its customers less sales tax, since the extra money it collects goes to the state, anyway.

But he said the chain had found it difficult to adjust its receipts to meet the state's regulations. Borella said the problem was with the bar code on manufacturers' coupons.

"Manufacturers' coupons don't have the level of detail that we would need to marry that with our point-of-sale system to specifically identify the product," Borella said, adding that he was "not aware of a POS system anywhere" that can handle the job.

If Giant Eagle gave customers the discount, "We could expose ourselves to additional tax and penalties," he said.

Kniley emphasized that Giant Eagle was not violating the law by charging more tax but insisted that satisfying the state's requirements wasn't difficult.

"Obviously, stores can do it, because Target and Eckerd do," Kniley said.

Although neither chain details coupons on their receipts, they both provide sufficient documentation on electronic tapes, he said.

Target and Eckerd are "doing right by their customers by charging tax on the lower amount," he said.

Giant Eagle rival Shop 'n Save has found a way to print detailed receipts that meet the state's standard, yet it still factors sales tax on the full price of an item.

State auditors who reviewed a faxed copy of a Shop 'n Save receipt said it complied with record-keeping regulations, meaning the store "should have charged the lower tax price," Kniley said.

He said Shop 'n Save customers who have receipts showing an overcharge should go to the store for a refund, or file a claim with the state.

Still, he said, the store wasn't breaking the law by collecting more tax.

"They've chosen not to charge the lower tax. That's up to them, not us," he said. "Under state statue, we can not require them [to change policies]."

But Shop 'n Save apparently is ready to make the switch on its own.

"In instances where the tax may have been misapplied, we are in the process of ensuring that we now pass the savings directly to our customers instead of remitting the monies to the state," Minnesota-based grocery distributor Supervalu said in an e-mail to the Post-Gazette on behalf of Shop 'n Save stores.

The chain added that when revenue department auditors came calling in August, "No concerns around coupons were raised."

Changes apparently are on the way at Wal-Mart, too.

Spokesman Marty Heires said the retailer is planning to install an upgrade to its computers in the next few weeks to keep better track of coupons, which should allow it to calculate tax based on the lower, after-coupon price at its 109 stores statewide.

"We could start as soon as the state gives us the green light," Heires said.

Coupons are hugely popular with consumers. Nationwide, shoppers redeemed 3.6 billion coupons for packaged consumer goods in 2003, with an average face value of 82 cents, according to NCH Marketing Services, the nation's biggest coupon processor.

Last year, 79 percent of shoppers in the mid-Atlantic region, including Pennsylvania, New York and New Jersey, said they used coupons when buying grocery, health care and household items at supermarkets, mass merchandisers and drugstore chains, NCH said. That was slightly higher than the national average of 77 percent.

Under Pennsylvania's tax code, most food items, clothing and medicines are exempt from state sales tax. But thousands of products are taxable.

Some major categories of taxable goods include soft drinks, cosmetics, jewelry, purses and wallets, soaps, detergents, paper goods, shampoo, hair coloring, shaving cream and razors, pet food, greeting cards, dinnerware, drinking glasses, rugs, linens, and items at prepared food counters such as pizza, sandwiches, salads and ice cream.

Besides grocery items, Pennsylvania consumers also are entitled to pay the lower tax when using coupons on more expensive taxable goods, such as a toaster oven, refrigerator, or 2-for-1 restaurant meal, as long as the coupon is for a specific item.

Coupons offering money or a percentage off an entire purchase don't reduce the tax bite because they can't be linked to a particular item, Kniley said.

Rebates don't count either because they don't reduce the purchase price at the time of the sale.

When it comes to coupons, Kniley said consumers should pay attention to their receipts and complain to the store if they don't get a discount on sales tax.

"Customers should be aware that this is something retailers can do. It's possible, and not that difficult."

Sales tax jumble
Under Pennsylvania's tax code, most food, clothing and medicines are exempt from state sales tax. But thousands of products at the store are taxable, including soft drinks, soaps and detergents, cleaning supplies, paper goods, cosmetics, jewelry and much more. The general guideline is to exempt items that are considered necessities. But sometimes, the difference between a taxable and nontaxable item can be confusing. For a complete list of taxable and non-taxable items, visit www.revenue.state.pa.us. Some quirky examples:

Source: Pennsylvania Department of Revenue