Does your store itemize coupons at the bottom of your receipt, to show which coupons applied to which products? If not, you may be out of luck if you want to dispute a charge.
That’s what a Pennsylvania couponer has been told, after losing a 38-cent coupon-related legal dispute involving BJ’s Wholesale Club several times over the past ten years, winning it twice, and now losing it yet again in what’s likely to be his final attempt.
The Pennsylvania Supreme Court has sided with BJ’s against shopper John Myers, who has argued since 2013 that he was wrongly charged 38 cents in sales tax when buying items with a coupon.
The case hinges on two key factors – the spirit of the law when it comes to how sales tax is meant to be calculated, and the letter of that law. Because, as Myers has discovered, they’re not quite the same.
Pennsylvania’s tax code says that sales tax is to be calculated on your discounted, post-coupon total after any manufacturer’s coupons are applied. Most other states calculate sales tax on the higher, pre-manufacturer’s coupon total. So that seems simple enough.
But that’s the spirit of the law. The letter of the law is far more convoluted – which is why it’s taken a decade, so far, for the courts to sort it out.
The Supreme Court zeroed in on a phrase in the tax code that says the taxable portion of a purchase made with a coupon is to be reduced “if both the item and the coupon are described on the invoice or cash register tape.”
During several visits to BJ’s that precipitated the whole dispute, Myers purchased items including Glade PlugIns, an Air Wick refill pack and Tide detergent, using coupons for each item. So he figured his taxable total should have been reduced. But all of the items were taxed at their full, pre-coupon price, leading Myers to argue he had been overcharged by 38 cents.
The crux of the dispute was the wording on Myers’ receipts. Each receipt described the items purchased, but described the coupons only as “SCANNED COUP” without indicating to which items the coupons were applied. So BJ’s and, later, several state tax agencies to which Myers appealed, all argued that BJ’s followed the letter of the law – since “both the item and the coupon” were not “described on the invoice or cash register tape,” BJ’s complied with the law.
A state court, and later a state appeals court, rejected those arguments and came down on the side of common sense. In two transactions, Myers purchased a single item and used a single coupon, so it was obvious to which item the coupon applied, without splitting hairs about the precise wording of the tax code. And in all of the transactions, only taxable items were purchased, so it didn’t really matter which coupons were used on which products, since they all clearly reduced Myers’ taxable total. In the courts’ view, “each receipt ‘identified’ that a coupon was used and ‘described’ the amount of the coupon,” in compliance with the tax code.
The Supreme Court has now officially disagreed, coming down on the side of the letter of the law rather than its spirit. “The coupons on all three receipts are identified as coupons but not described,” the panel explained. “Without a description of the coupons, it is impossible to determine whether any of the coupons were of the type that… establish(ed) a new purchase price.” It was Myers’ “burden to prove that he was entitled to a refund of sales tax,” but “he did not meet his burden.”
So, ten years after he first filed suit against BJ’s, Myers still doesn’t have the 38 cents to which he says he’s entitled. And since it’s state and not federal law at issue, there’s no appealing this decision to the U.S. Supreme Court – the Pennsylvania Supreme Court’s decision is final.
Myers still has a pending class action lawsuit against BJ’s that was put on hold while the state tax dispute played out, in which he argued the retailer made it a “regular practice to improperly charge all customers tax on the full price of discounted taxable purchases” and demanding repayment on behalf of all affected shoppers. But with BJ’s now officially in the clear for good, that dormant lawsuit is likely to become defunct.
So all that BJ’s couponers can do now is watch their receipts, and maybe lobby their state lawmakers to make a complicated tax code just a little clearer – and fairer to couponers for whom every penny counts.
Image source: BJ’s Wholesale Club
