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.
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