A recent news story about a Target store located in South Carolina has some people very upset, especially shoppers who feel they were “duped” by the store. Target implemented a sales tax increase too early and charged customers one percent more than they should have on sales. In this case, it’s the responsibility of the retailer to reimburse customers for collecting too much sales tax. The State of South Carolina says they will not be fining Target for this mishap. State tax officials say that Target is making a “good faith” effort to correct the mistake and changed their sales tax rates at their register systems immediately once it was brought to their attention.
The bigger question is, why didn’t Target catch the mistake earlier? Analysts are pointing to this event as evidence that sales tax is just too confusing. Rates and rules change frequently, each jurisdiction has its own special quirks, and it’s hard to keep up. We’ve mentioned before that different systems might situs rates differently, specifically in the case of a CPA using different sales tax software than the company that hired the CPA. Between different software programs and changes in the rules, it’s easy to make mistakes. It’s not clear that Target could have avoided their error and averted what could come as a public relations disaster — “good faith” means they made a mistake and are trying to fix it, not that they were perfect.
The story has already been picked up by national news sources. It looks like Target will just have to take their lumps on this one. But this is another reason, it seems to us, that it’s so important to use sales tax software that verifies that collection rates are correct. You can’t expect to keep up with all the complications and changes on your own. Fortunately, you don’t have to. Contact us today to learn how Sales Tax DataLINK products can help you keep up with the ever-changing world of sales and use taxes.
