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Thread: Should I expose a sales tax fraud?

  1. #1
    Flashaholic*
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    Default Should I expose a sales tax fraud?

    I am torn about this because it may be a trivial matter, but it kind of burns me up a little any way. I normally don't pay close attention to how much sales tax I am charged, but I have noticed that 2 different local restaurants seem to be overcharging for sales tax. I think it is a scam so they can skim a few cents off of each transaction and pocket the excess money. The amount of the overcharge is only about 1% of the sales amount, but I guess it adds up to a large sum of money over numerous transactions. These two restaurants are not under common ownership, but coincidentally, both sell Greek/Mediterranean fast food. I didn't say anything at the time of the purchase because I wasn't sure until later when I had a chance to look at the math carefully. Also, the sales tax rate here has increased twice in the past couple of years and has also been lowered on some food purchases, so it is a little confusing to remember what the correct rate is. Even so, there is no justification for rates as high as I have been charged.

    I have thought about reporting it to the state revenue office as fraud, but I have a strong feeling that nothing at all would be done about it. What do you think? Should I do something and if so, what? Or is this just an insignificant math error and should I forget about it?

    By the way, I am not a regular customer at these restaurants and thanks for your opinion.

  2. #2
    Flashaholic* BIGIRON's Avatar
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    Default Re: Should I expose a sales tax fraud?

    A thief is a thief. Makes no difference how they steal.

  3. #3
    *Retired* NewBie's Avatar
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    Default Re: Should I expose a sales tax fraud?

    If they do it once, they'll do it again. Run them into the ground.


    Find a reporter.

  4. #4
    Flashaholic* turbodog's Avatar
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    Default Re: Should I expose a sales tax fraud?

    Be sure it's not an area-specific tax or a restaurant tax. The state tax commission will be able to help you with that.

  5. #5
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    Default Re: Should I expose a sales tax fraud?

    I would at least qestion it. I know around here some resturant-hotels charge a differnt tax rate then the regular resturants, so there could be a real reason for it, but it can't hurt to check in to it.

  6. #6
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    Default Re: Should I expose a sales tax fraud?

    OK - That was it. There is a special "prepared food and beverages" tax of 1% in that county. I had checked the State Revenue page, which listed the county tax rates, but I didn't check the county tax page for any extra "bonus" taxes. I guess I was being too suspicious and conspiracy-minded. Thanks for your opinions!

    When I was a kid we only paid 4% sales tax here. Now it is 7% - 8%! What is happening?

  7. #7
    Flashaholic*
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    Default Re: Should I expose a sales tax fraud?

    We have Fed,State,County and now City tax here. No wonder I buy on line out of state when I can.
    Topper [img]/ubbthreads/images/graemlins/smile.gif[/img]

  8. #8
    Flashaholic* turbodog's Avatar
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    Default Re: Should I expose a sales tax fraud?

    The US still has some of the lowest overall taxes in the developed world.

    Dang.... someone go catch that worm will ya!

  9. #9
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    Default Re: Should I expose a sales tax fraud?

    I was going to say the same as Turbodog.In Charleston S.C. there is a 1% sales tax added to restaurants only in the Chas. area,not the surrounding areas.I really doubt they'd try to add 1% on tax to gain anything because they'd know the penalty for getting caught would be FAR greater than 1%.

  10. #10
    Flashaholic* Sub_Umbra's Avatar
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    Default Re: Should I expose a sales tax fraud?

    Sales tax issues can be pretty creepy to resolve in the real world. I don't trust anyone. Yes, some restaurants skim excess tax charges. If it stopped right there it would be pretty easy to deal with. The real problem starts when State/City officials know what they're doing and are getting a kickback on it.

    In situations like that I tend to first do the research so I know that they are scamming. Then I would make an anonymous call to the proper local authority from a phone I can't be traced to. I would tell them what's going on and ask them to check it out and do something about it.

    In the end they will invariably add that since you won't give your name they won't be able to contact you to tell you how it comes out. Then tell them that's OK cause you'll go eat there again in three of four weeks and if it's still going on you'll call the State Attorney General's office, tell them the restaurant story with the addition that the local govt office is getting paid off and you'll give the state AG HIS name too.

    This can get numerous types of issues resolved without getting yourself killed. Most of the time.

    As a side note, I would never follow up with the AG Office threat. I don't trust them either. The real second phase of the plan is to get the info to one of those vicious investigative reporters that works for a local TV station. They do stories about corruption in nursing homes and roll around in lots of crud all the time. I wouldn't let him know who I was, either.

    I have actually had success with some blatent fire code issues using these techniques that wouldn't have gone anywhere otherwise because the fire inspector was on the take. In that particular case, he didn't have the stroke with the AG's Office and the huge violation that had gone on for years and years in a very prominent tourist location was fixed in 24 hours.

  11. #11
    *Flashaholic* PhotonWrangler's Avatar
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    Default Re: Should I expose a sales tax fraud?

    I went into a sporting goods store once and picked up a couple of those protein bars and proceeded to the checkout. The cashier, who didn't seem to give a rat's ass about accuracy, rang up the sale with tax. I politely informed her that food items weren't taxable in this state. She didn't want to be bothered with such details and insisted that it was rung up correctly. I then insisted that it was FOOD and not taxable. She said that it "wasn't food."

    "HUH? These candy bars aren't food? Then what ARE they?"

    "They're, uh, exercise equipment and that's taxable."

    "Exercise equipment? These are CANDY BARS!!! You don't LIFT them, you EAT them!! That fits the definition of food!!"

    She didn't want to hear it.

    I told her that I wanted to see the manager, and she said no!! Again she was too damned lazy to be bothered with such difficult tasks as thinking. So I shoved the protein bars across the counter towards her, and I said "keep 'em!" and stalked off. I never walked into that store again.

    They've since gone out of business. I'm not surprised.
    [img]/ubbthreads/images/graemlins/rant.gif[/img]

  12. #12
    Flashaholic* GJW's Avatar
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    Default Re: Should I expose a sales tax fraud?

    Someone explain to me how they can charge sales tax on a rented video?!?!?

  13. #13
    Flashaholic* Wits' End's Avatar
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    Default Re: Should I expose a sales tax fraud?

    Sounds like you resolved it but my suggestion would have been to call the restaurant and ask them. It could be an honest error.
    I have found since opening my shop that some of the sales tax rules in MN are difficult to figure out.
    Here are a few of the ones that make me wonder if it couldn't be easier. (and fear that it could be harder [img]/ubbthreads/images/graemlins/smile.gif[/img] )
    Candy is taxed, Kit Kat bars and Licorice are not because they contain flour.
    Block ice is taxed, cube isn't, you can eat cubes.
    Raw and roasted nuts are not taxed unless there is salt on them.
    Dried fruit isn't taxed unless there is added sugar.
    Baking ingredients are not taxed, chocolate chips are.

    I do the best I can and make sure that every penny I collect I pay. I hope they can't get me too badly for an honest error, but I know I can be strung up for not paying what I collect.

  14. #14
    Flashaholic* Sub_Umbra's Avatar
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    Default Re: Should I expose a sales tax fraud?

    [ QUOTE ]
    Wits' End said:
    ...Candy is taxed, Kit Kat bars and Licorice are not because they contain flour.
    Block ice is taxed, cube isn't, you can eat cubes.
    Raw and roasted nuts are not taxed unless there is salt on them.
    Dried fruit isn't taxed unless there is added sugar.
    Baking ingredients are not taxed, chocolate chips are...

    [/ QUOTE ]

    That would drive me nuts, and it would probably be a short drive...

  15. #15
    Flashaholic K A's Avatar
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    Default Re: Should I expose a sales tax fraud?

    [ QUOTE ]
    Wits' End said:
    Sounds like you resolved it but my suggestion would have been to call the restaurant and ask them. It could be an honest error.
    I have found since opening my shop that some of the sales tax rules in MN are difficult to figure out.
    Here are a few of the ones that make me wonder if it couldn't be easier. (and fear that it could be harder [img]/ubbthreads/images/graemlins/smile.gif[/img] )
    Candy is taxed, Kit Kat bars and Licorice are not because they contain flour.
    Block ice is taxed, cube isn't, you can eat cubes.
    Raw and roasted nuts are not taxed unless there is salt on them.
    Dried fruit isn't taxed unless there is added sugar.
    Baking ingredients are not taxed, chocolate chips are.

    I do the best I can and make sure that every penny I collect I pay. I hope they can't get me too badly for an honest error, but I know I can be strung up for not paying what I collect.

    [/ QUOTE ]

    Oy! [img]/ubbthreads/images/graemlins/ooo.gif[/img]

    Here in Wichita, KS everything to the best of my knowledge is taxed at a flat 6.3%. Candy, milk, clothes, etc. State/City officials have been changing how and where things get taxed. Like for example.. You find a car you like in a different county with a lower tax rate. Instead of getting taxed at that lower rate you are taxed with the rate from where you live.

    Then they have been pondering collecting sales tax from Internet sales. But I do not think that has gone very far yet.

  16. #16
    Flashaholic* Wits' End's Avatar
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    Default Re: Should I expose a sales tax fraud?

    And how about gloves?
    Clothes are not taxed in MN, gloves are not taxed, unless they are work gloves. Tools I guess.

  17. #17
    Flashaholic*

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    Default Re: Should I expose a sales tax fraud?

    Omigod, I can't believe those MN rules, Wit's End, that's nuts. Oh wait, is there salt on them? I guess if everything is barcoded correctly then it's easier, but that's at the end of the process, not at the beginning, when you are trying to figure it all out.

    Glad it turned out OK, Lurker!

    daloosh

  18. #18

    Default Re: Should I expose a sales tax fraud?

    It's like in some 7-11 or convenient stores. In some states if you buy a frozen food item, say a burrito it's one price but if you heat it up in their microwave it's considered prepared food so there's a different tax added.

    Crazy.

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