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2WTK Finds Half Of Tested Stores In Triad Overcharge Sales Tax

6:14 PM, Jan 21, 2014   |    comments
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GREENSBORO, N.C. -- Watching every penny you spend? Well, 2 Wants To Know did some digging and found half of the Triad stores we tested overcharged on sales tax. It all comes down to a loophole in our tax code.

You could call it "Candy Confusion." In North Carolina, and 22 other states, candy can be taxed at a higher rate than other foods - unless flour is listed as an ingredient, like a Kit Kat or Twix. Foods containing flour are considered "healthier," so they can only be taxed at two percent. But half the cash registers we tested didn't.

We randomly picked phone book listings out of envelopes and chose 10 spots, five chain and five mom-and-pop stores. We bought a Kit Kat from each store that cost about $1. It contains flour -- so the stores should have only charged two cents. We found five stores overcharged us. The Krishna Food Mart, Kim's Grocery and Jay's Grocery all charged seven cents. Summit Shell Xpress Mart and Sheetz charged eight.

Just a few extra pennies, but 2 Wants To Know's results even surprised Scott Drenkard. He's an economist for the Tax Foundation.

"Whoah. That's a really great case study," he said.

The non-partisan tax research group studies policies all over the U.S. They call North Carolina tax code confusing. And candy is just one of the items that could be costing you more. Alcohol, cigarettes and online sales all have different tax rates.

"You want a code that makes it easy for people to pay taxes on the items taxes are due on and doesn't have to make it so that people are paying taxes on products where they're not due," Drenkard said.

On the phone - the Krishina Food Mart manager said the flour rule was news to him. He vowed to fix the overcharges, but wondered why the state won't make it easier to give stores and shoppers a break. 2 Wants To Know also called the other stores to tell them about the overcharges.

And we reached out to the state as well. The Department of Revenue does check to make sure stores charge the right sales tax. But they state law makes all inspection information confidential. The department can't even tell us how often they check a store.

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