Telebrands CA Sales Tax Overcharge, S&H Overcharge Visalia, California
I had recently purchased a Jupiter Jack. It was advertised for only $19.95+S/H. As I proceeded through the process, they offered a 2nd Jupiter Jack for an additional $19.95 but no additional shipping/handling. I skipped that offer and was offered an upgraded Jupiter Jack, (24k gold connectors) for an additional $9.99. I accepted that offer and proceeded on. After another offer or two I finally check out. The total came out to $43.96. Jupiter Jack $29.98 and S/H $13.98. I do not remember exactly what the original S/H was, but I know it was not $13.98. On the online receipt I printed it states, "In California and New Jersey, applicable sales tax may apply." So far I really don't have a problem until I checked my online banking transactions. Telebrands charged my account $47.60 not $43.96. the difference is added sales tax. Still not a problem until I did the math and noticed that they included the shipping and handling before calculating the California sales tax of 8.25%. (...and even that was wrong).
Here's what they did: $29.98+$13.98=$43.96. then calculated $43.96 x .0825 and came out to $3.64 tax. 1 cent too much. No big deal right? WRONG! They illegally charged sales tax on shipping and handling. It should have been: $29.98 x .0825 = $2.47 tax. the receipt should have said. $29.98 + $2.47 tax + 13.98 S/H for a total of $46.43 an overcharge of $1.17. I called telebrands' Customer Service and they immediately offered to credit me $5.00. I told them that I thought this might be a bigger issue. The CSR connected me to a supervisor. The supervisor told me that the "system" calcuates the sales tax. I asked her if it was fair to assume that ALL California customers would have automatically been overcharged since the computer "system" does the calculations? The supervisor insisted that it was an honest mistake and that she would credit me $1.17. that's what brought me here. I'm thinking that probably ALL California customers who purchased something through telebrands was overcharged sales tax. In addition; I wonder if those connectors I upgraded to are actually 24k gold...
3 Updates & Rebuttals
Anonymous
Indianapolis,Indiana,
U.S.A.
I have to charge tax on shipping charges although I don't like it
#4Consumer Comment
Tue, June 15, 2010
I just wanted to let you know that Pampered Chef taxes their shipping. I am an Independent Consultant for them in Indianapolis, IN and that's how it works for me. My invoices make me add the shipping charges and includes it in the total before taxing it. Not sure if it's right, but I can't do it any other way. Just wanted to let you know that I think taxing shipping is actually pretty common.
justin.j.smith@gmail.com
Citrus Heights,California,
U.S.A.
What -we- do with sales tax
#4
Mon, August 17, 2009
The company I work with almost alwase gets the sales tax right... however, when we do get it wrong we try to make it right. We will either issue a refund for the difference if it's in our favor - if it's in the customer's favor we just eat the difference.
Robert
Irvine,California,
U.S.A.
Not neccesarily a RipOff..
#4
Mon, August 17, 2009
Thank's to our wonderful State Representatives, it MAY be taxable.
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This is actually a question on the CA Board of Equalization web site
Q:Are delivery and handling charges taxable?
A:
Delivery charges.
You have the property delivered directly to your customer using a common carrier, the U.S. Mail, or an independent contractor Tax does not apply to the delivery charges under these conditions if the charges are clearly stated as a separate entry on the invoice or other bill of sale. If the delivery charges are not stated separately, they are taxable.
Example. You sell a refrigerator and have it delivered by an independent contract carrier. On the invoice, you show a $750 charge for the refrigerator plus a separately stated $50 charge for delivery (the amount charged you by the carrier). Since the delivery charge is stated separately, tax applies only to the charge of the refrigerator ($750). If the invoice had shown a single charge of $800, tax would apply to the entire amount.
Note: If you charge more for delivery than your actual costs, the added amount is subject to tax. In the example above, if you had charged your customer $60 for delivery, but your actual delivery cost was $50 (the amount charged by the independent contract carrier), tax would apply to the additional $10 charge. You use your vehicle to make the delivery Tax applies to the delivery charges if you use your own vehicle, whether or not those charges are separately stated on the invoice.
Example. You sell a refrigerator and deliver it to your customer using your own vehicle. On the invoice, you show a $750 charge for the refrigerator plus a separately stated $50 charge for delivery. Tax applies both to the delivery charge and the charge for the refrigerator. Note: Tax does not apply to delivery charges using your own vehicle if there is a written contract of sale, signed before delivery, that transfers ownership of the property to the purchaser prior to delivery.
Handling charges.
Handling charges are generally taxable.
Combined charges.
If you charge a single amount for delivery and handling (for example, the invoice shows a single amount for "postage and handling" or "shipping and handling"), the portion of the charge that represents handling is generally taxable, while the portion that represents delivery may or may not be taxable.
Note: It is important to use terms such as "delivery," "shipping," or "postage" on the invoice to represent delivery charges. A separately stated charge that says only "handling", for example, is not considered a delivery charge and the entire handling charge is taxable--even if postage or shipment charges are indicated on the package.
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Having had to deal with Sales Tax regulations with various States, I can tell you that they are very complicated. As you may see because this is only 1 State. I am pretty sure that if you read through the conditions you will find that based on what they did it is probably correct. I am also pretty sure that the people that did the calcuations in the system know a bit more than the CSR. So perhaps you should have taken the $5 credit. However, even if it was a mistake they are not keeping the money. It is going to the State of CA.