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Are you being wrongly charged sales tax on certain types of food?

Consumer questions why Dunkin' Donuts charged him sales tax on unprepared bagels to-go
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Posted at 6:22 PM, Aug 19, 2020
and last updated 2020-08-20 17:37:46-04

BUFFALO, N.Y. (WKBW) — COVID-19 is having a dramatic impact on the way we get food as many establishments have closed-off eating areas and are relying more on curbside pickup. But with those changes come concerns by some about sales tax and whether it is being applied properly to food.

"You just feel like you are being ripped off. It is money that could be kept in my pocket," said Bohdan Petriv in Buffalo.

Petriv said he was very surprised to see that he was charged sales tax on the purchase of 12 unprepared bagels to-go from a Dunkin' Donuts recently (also known as just Dunkin'). "They were not cut. They were not buttered," added Petriv.

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Knowing he could buy the exact same things in local Tops and Wegmans stores without sales tax, Petriv questioned the Dunkin' Donuts manager. "The manager on duty could not give me a valid explanation. His explanation was this is how our cash registers are programmed."

Adding to his concern, Petriv found several online articles detailing previous lawsuits against Dunkin' Donuts for illegally charging sales tax on non-taxable food items, such as water and bagged coffee, in the tri-state area of New Jersey, New York City, and Connecticut in 2016.

"This gave me the impression that they are still charging sales tax on groceries," explained Petriv.

A public relations and social media specialist from Dunkin' responded to 7 Eyewitness News saying the company will look into the matter.

Dunkin’ Statement:

"All Dunkin' restaurants are owned and operated by individual franchisees, independent business owners who are required to comply with all applicable state and federal laws including but not limited to those governing tax. Upon learning of this issue, we contacted the franchise owner, who informs us he is investigating this matter in order to confirm tax is being charged correctly and that his crew is educated on this issue.”

The Better Business Bureau of Upstate NY said Dunkin' restaurants are not an accredited business and have a B- rating from the BBB.

HOW DO YOU KNOW WHICH FOODS ARE SUPPOSED TO BE CHARGED SALES TAX?

Reporter Ed Reilly contacted the New York State Department of Taxation and Finance to get clarification. Some foods can be both taxed and untaxed depending on the circumstance of sale.

While any sort of preparation mandates sales tax, food establishments that have areas for eating must also charge sales tax on items that could be eaten on location.

The NYS Department of Taxation and Finance provided a link to a document detailing the rules regarding sales tax and which food products it applies to.

WHAT IF I WAS INCORRECTLY CHARGED SALES TAX? CAN I GET A REFUND?

If you believe that you were wrongly charged sales tax, you can submit an online claim with the NYS Department of Taxation and Finance. The Department will investigate and determine if you should get a refund.

You can file a complaint by clicking on this link.