Deliveries become a taxing woe in Baxter
If you purchase a big ticket item in Baxter to be delivered outside that city this holiday season, don't forget to make sure you're not charged that extra one-half percent sales tax.
On Oct. 1, Baxter's .5 percent sales and use tax went into effect. The tax is charged on any purchases made in Baxter, except for food and clothing. There is a $20 excise tax on vehicle sales.
But this sales tax does not apply to Baxter businesses that deliver their goods outside of the city and many people may not be aware of that. If customers purchase something in Baxter and have it delivered to their home outside of Baxter they should only be charged 6-1/2 percent sales tax on those delivered goods.
Paul Kiel, a contractor who lives in Unorganized Territory, realized he had been inadvertently charged 7 percent sales tax on the many construction items he purchased from Menard's in Baxter that had been delivered to Unorganized Territory, where he lives. He returned to Menard's this week and received a $110 refund. He was told that he was the first person to bring the issue up at the store.
Kiel said people need to be aware and check their receipts if they had something delivered from Baxter. It could save them money.
When Paul Kiel, a contractor from Unorganized Territory, discovered he had been charged the one-half percent sales tax in Baxter for the many construction goods he had delivered outside the city, he returned to Menard's in Baxter. Kiel was pleased to receive a $110 refund. Brainerd Dispatch/Nels Norquist » Purchase reprints of this photo.
"I know it's not Menard's fault, it's everybody in general," Kiel said of Baxter businesses. He said store employees may not realize they are in error when charging that extra one-half percent sales tax for deliveries. "You know how much that adds up to every day that they're not supposed to be collecting? It saved me $110 and I'm not even done. I've got more receipts to go through."
Tim Johnson bought a 40-inch Sony LCD television at Radio Shack in Baxter and had it delivered to his home about four miles away in Unorganized Territory. He didn't realize he was charged the one-half percent sales tax until Kiel, a friend and co-worker, had him check his receipt. Johnson planned to return to the store for his $7.50 refund.
"I thought, what the heck, it's worth doing," said Johnson of getting a refund. "It happens to so many people that it really adds up to a lot of money."
"It's one of those quirks we hadn't thought of ahead of time and right away we had to start thinking about it," said Baxter City Administrator Dennis Coryell.
Coryell said the city's greatest number of inquiries involving the one-half percent sales tax have come from companies that provide utilities in the city, such as cable, Internet, phone, etc. He said these companies have had to make changes in their computer system to charge Baxter customers the 7 percent sales tax, rather than the 6-1/2 percent tax charged to the vast majority of their thousands of customers.
The one-half percent sales and use tax also applies to items bought over the Internet, by phone or from any business that doesn't charge Baxter sales tax but the items are used for business or personal use in Baxter.
The Baxter sales tax is expected to generate more than $15 million before it expires in 12 years. The money raised from the tax will be used for water and wastewater facilities and building and equipping a fire substation.
JODIE TWEED can be reached at jodie.tweed@brainerddispatch.com or 855-5858.