No sales tax should be charged on bottle deposits

DOR recently heard about a consumer who paid sales tax on both the price of the beer and the bottle deposit.

To be clear as possible on this, sales tax should be charged on the price of the item(s) before the cost of the bottle deposit is added to the bill. No sales tax should be charged on the cost of the deposit.

In a foot note to Technical Information Release (TIR) 09-11 distributed last summer, DOR wrote that "In calculating the sales tax on alcoholic beverages subject to the container deposit law (beer and malt beverages), G.L. c. 94, §§ 321 – 327, the container deposit is not part of the sales price subject to tax."

If your local package store is charging sales tax on both the price of the product and the bottle deposit, tell them they are doing so improperly and ask them to give you a bill without sales tax on the bottle deposit. And if they do not correct their error, please call DOR's Taxpayer Advocate at 617-626-2201.

One other note -- please save the incorrect sales receipt as proof that the error occurred.

Comments

[Robert Bliss]

Joan, unless the sweatshirt cost more than $175 (which doesn't seem too likely) you should not have been charged sales tax. I would advise you take the sales slip back to the store and ask for repayment of the sales tax, and if they refuse, call the DOR taxpayer advocate at 617-626-3235.

[Joan Fowler]

I purchased clothing (sweatshirt) at Jo-Ann's in Saugus and I was charged a 6.25% sales tax on the item.

I was under the impression that clothing was not subject to the sales tax.

[Damon Borrelli]

This is true now but it will probably change in the future. California which has the equivalent of the expanded bottled bill proposed by the governor – in hopes to increase revenue rather than protect the environment – taxes the deposit.

Bottles and cans make up about 4% of the waste stream and 8% of litter. We need better recycling to include more items than just bottles and cans. Expand curbside recycling not the bottle bill.

Do you realize that a deposit / redemption system like we have in Massachusetts does not even guarantee that once redeemed those bottles and cans are actually recycled. By putting an artificial value on bottles and cans and forcing those items to move through a deposit / redemption system rather than a recycling system, you are robbing recyclers of their most valuable scrap metals (aluminum) and hurting their operations.

Let’s get recycling out of the 70’s and start to Recycle for Today. Step 1 Can the Bottle Bill.