City sales tax applied to cyber Monday purchases incorrect

Briar Rabbit

Briar Rabbit

Line Up and Wait
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Mar 22, 2017
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626
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Albion, Nebraska
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Rob
Monday I made an E-bay purchase. I live near a small town of 1,600 residents that has a 1% city sales tax. There are also 1,600 people with rural mail routes that have the same post office zip code and do not live in the city limits and should not be charged this tax. E-bay has a formula that I understand was given to them by the sate revenue department which is used to calculate the tax to be paid at “checkout”. So for instance a $500 purchase is charged $5 of taxes for the city even if you should not be required to pay it.
So when the sales tax amount popped up I talked to an E-bay representative and asked them to refund the 1%. Was told initially they have no method to do that and I should go to the local city and ask them to refund it. I did not accept that monkey and said regardless of where they obtained the formula they were incorrectly calculating my tax liability and it was their responsibility to make it right. Similar to the $7 landing fee ADS-B thread if it is not correct and they are charging twice as many people this tax it amounts to a pretty big undeserved windfall for the city. Not that big a deal for just one occurrence but it happens several times a year to me (Jepsen is also an example but they refunded it). E-bay said they would work on a solution and call me back tomorrow.
The individual at E-bay was very courteous, totally understood what E-bay is doing is incorrect, but helpless to make it right. They need to ask the customer if they live in the city limits and adjust their formula accordingly. Probably a big expense for them. Or alternatively at least have a way to manually override this portion of the tax when requested. Any other ideas? Bets on the outcome?
 
If you fly in or out of the ALBION Municipal Airport consider it a contribution.
 
Good point. And it is not that much money for a single purchase but being in a very rural area do purchase quite a few items on Amazon and other sites. 90% of the improvements to our airport are made with federal tax dollars, only 10% local. We do rent a hangar from the city, almost no city maintenance on the hangar and frequently have some problems with the doors and etc. Their underground fuel system is archaic and not something we will use until it is upgraded. They do a pretty good job of removing snow from the runway and main taxiway but have more than once had to take one of my John Deere farm tractors out there to remove snow from in front of the hangars. And have personally swept up the mud & gravel the ag chemical companies leave on the taxiways when delivering pesticides to the spray pilot's storage tanks multiple times. So I feel I do contribute a bit to the effort. Also still purchase tens of thousands of dollars of stuff in the city limits every year so they do get a good chunk of change from us, likely more than most residents in the city limits pay on sales tax.
 
Briar Rabbit said:
Monday I made an E-bay purchase. I live near a small town of 1,600 residents that has a 1% city sales tax. There are also 1,600 people with rural mail routes that have the same post office zip code and do not live in the city limits and should not be charged this tax. E-bay has a formula that I understand was given to them by the sate revenue department which is used to calculate the tax to be paid at “checkout”. So for instance a $500 purchase is charged $5 of taxes for the city even if you should not be required to pay it.
So when the sales tax amount popped up I talked to an E-bay representative and asked them to refund the 1%. Was told initially they have no method to do that and I should go to the local city and ask them to refund it. I did not accept that monkey and said regardless of where they obtained the formula they were incorrectly calculating my tax liability and it was their responsibility to make it right. Similar to the $7 landing fee ADS-B thread if it is not correct and they are charging twice as many people this tax it amounts to a pretty big undeserved windfall for the city. Not that big a deal for just one occurrence but it happens several times a year to me (Jepsen is also an example but they refunded it). E-bay said they would work on a solution and call me back tomorrow.
The individual at E-bay was very courteous, totally understood what E-bay is doing is incorrect, but helpless to make it right. They need to ask the customer if they live in the city limits and adjust their formula accordingly. Probably a big expense for them. Or alternatively at least have a way to manually override this portion of the tax when requested. Any other ideas? Bets on the outcome?
Click to expand...

I'll put 10 bucks on you'll have to go to the taxing authority to get reimbursement. I'll hedge it with 5 bucks on maybe ebay will do what Jeppesen did. I ain't putting nuthin on they will fine tune their computer program to accommodate city and county borders crossing zipcode borders throughout the US
 
The issue of sales collection on internet sales has been under discussion in the Kansas legislature since the 1990's. They still haven't figured out how to fairly accomplish the task. Consider where I live in a small central Kansas county. We have a population of less than 3,000, four towns with post offices so four zip codes. Also there are mailing addresses at the edges of the county for 5 or 6 post offices located outside the county. Only a few of these towns have sales taxes but there is a county wide sales tax in addition to the state sales tax. No maps or GIS data layers exist to exactly identify which addresses are subject to what tax rates. The solution of course is a GIS data base that ties a mailing address to a tax rate table...for the entire United States. Who would do that? It is well beyond the means of most companies except Amazon or Google. And why would they do it, only to make more work for themselves. States could mandate it but that would only lead to a patchwork of confusion...oh wait, that's what we have now. Congress could mandate it, and fund it probably, but that would run counter to the current climate of less regulation/government intrusion into the affairs of business although it would benefit a lot of small town mainstreet businesses.

With respect to the suggestion of refunds from the taxing jurisdictions, in Kansas anyway, there are statutory rules about the distribution of that money and the prospect of getting a refund are slim to none.
 
Why couldn't the ZIP-4 accomplish who lives in in taxable jurisdictions and who doesn't?
 
Because the post office doesn’t establish zip codes based on sales tax nor is the post office in business to act as a tax monitoring agency
 
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There are plenty of services out there that can properly map sales tax to a street address. As to why Ebay isn't using one of them, who knows.
 
You show a better understanding of your local sales tax rates than I have. So I looked into it - Summit Racing seems to be charging me a bit above 9%, but for my county the local sales tax (combined) should be about 8%. So there's something that seems to be wrong in their math. I think they started doing it earlier this year so they're a bit off. I should point this out to them.
 
When I was the Controller for a family run firm that did national projects (required us to charge the tax rate where project was done) we used a tax subscription product that was based on zip code. I don't think zip+4 was an option. We had a hard enough time keeping up with all the filings. Made me believe that a national sales tax was not such a bad idea.
 
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