Making cents of new sales tax Retailers allowed to round up, down to nearest penny as rate jumps to 6.35

August 3, 2011

Is your head spinning from all of the new Democrat-sponsored state taxes? Join the club! And check out this article from the Waterbury Republican-American:

Article as it appeared in the Waterbury Republican American on Sunday, July 31, 2011
The increase in the state’s sales tax on July 1 from 6 percent to 6.35 percent raises an interesting question:

How do you pay 35-hundredths of a penny?

With dollar stores and dollar-priced items on fast food menus ever more popular during this economic downturn, paying $1 for something is increasingly common. Fortunately, though, you don’t have to slice up your Lincoln pennies.

According to Commissioner Kevin B. Sullivan of the state Department of Revenue Services, retailers are allowed to round down or round up to the nearest penny. So for a $1 item, you will still pay 6 cents in sales tax.

A recent trip to a Dollar Tree Store on Route 10 in Cheshire, where everything is priced at $1, resulted in a total sales price of $1.06.

“Let’s say you bought a $2 item,” Sullivan said. “That would be 12.7 cents in tax, but the retailer would charge you 13 cents. … It’s a little like being back in grade school, when they taught you to round up at half and above, and round down below that.”

To help retailers who may not use computerized registers in their stores, the state publishes a tax rate schedule showing the tax amount required to be collected for each sale amount up to $100.07.

The two-page chart, known officially as form OR-149, is available for printing or downloading from the department’s website.

Sullivan said it’s possible that some retailers may try to benefit from the change in the tax rate by collecting more than is required and keeping the difference.

“We have had cases in the past where businesses have overcharged, … particularly if it’s cash,” he said. “If someone is remitting the extra amount collected in error, then we would try to return it to consumers somehow. But if they are just keeping the additional amount, that would be illegal.”

Consumers concerned about how much tax was charged for an item should first return with the receipt to the store and discuss it with a manager or store owner.

State officials, however, said the consumer also should contact the Department of Revenue Services to let officials know about the problem, at (860) 297-5962 .

Businesses that are registered with the Department of Revenue Services have all been informed of the change in the tax rate and have been told where to find the tax table, Sullivan said.

“Whenever taxes change, there’s always a period of adjustment,” he said. “But we work with the various retail merchant associations to get the word out.”