Pier 1 Imports in Jefferson City has adjusted its sales tax rate after discovering it had been set 1 percentage point higher than it should have been.
The store, located in Wildwood Crossings at 3535 Missouri Blvd., had been charging customers a sales tax rate of 8.725 percent. The correct rate, which combines the sales tax rates of Jefferson City and Cole County, is 7.725 percent.
Steve Korsmeyer, Cole County clerk and a former Jefferson City business owner, noticed the error while on a personal shopping trip at the store Dec. 20.
"We had purchased a chair, and I just happened to see that the sales tax was 1 percent more than it should be," Korsmeyer said. "So I knew they were either in a special district or they were charging too much."
The Wildwood Crossings shopping center is not located in any special taxing district.
When local Pier 1 Imports staff said they were unauthorized to issue him a refund for the overcharged sales tax, Korsmeyer contacted the Missouri Department of Revenue and Pier 1 Imports' corporate office to report the error.
"On Monday, December 21, Pier 1 Imports' Home Office in Forth Worth, Texas, was informed by the Missouri Department of Revenue that the (sales tax rate at) the Pier 1 Imports store located at 3535 Missouri Boulevard in Jefferson City, Missouri, is 7.725 percent," Melissa Simons, media relations specialist for Pier 1 Imports, wrote in an emailed statement. "All sales tax collected at the Jefferson City, Missouri, store has been remitted to the Missouri Department of Revenue."
Korsmeyer said he received a refund via Pier 1 Imports' corporate office. The local store corrected the sales tax rate Dec. 21, Simon said.
The Missouri Department of Revenue (DOR) is reviewing the situation, Michelle Gleba, DOR director of communications, confirmed.
"If warranted, the department will follow up with an audit by its Field Compliance Bureau," Gleba said in an email.
Under Missouri law, the DOR is authorized to refund businesses that have remitted more sales tax than they owed. To obtain a refund, the business must submit a claim along with amended sales tax returns to the state department, according to information on the DOR website.
DOR is not authorized to release information about whether Pier 1 Imports or any taxpayer has received a refund, Gleba said.
"We have contacted the Department of Revenue to determine the appropriate approach for any sales tax above the 7.725 percent that was collected and remitted to the Department of Revenue and are waiting to receive guidance on next steps," Simon said.
State law does not require businesses to return refunded sales tax payments to the original purchasers - meaning if Pier 1 Imports does receive a refund from the DOR, the business is not required to pass those refunds on to customers who overpaid.
"In many cases, the refund is the result of an over collection of sales tax by the vendor and the refund is due back to the original purchaser," according to an audit of the DOR's administration of sales and use tax conducted by State Auditor Nicole Galloway in September 2015. "A vendor may not be able to identify the original purchaser in some cases, such as cash transactions or other point of sale settings where purchaser name or contact information is not captured."
However, individuals may request a refund for overcharged sales tax from the business or from the DOR.
To request a sales tax refund, individuals must submit a purchaser's claim along with supporting documentation to the DOR within three years of the due date of the original return or the date paid by the vendor. For more information about business tax refunds, visit the DOR's website at dor.mo.gov/faq/business/refund.php.
The September 2015 audit does note "if both the vendor and the original purchaser file for the refund, the DOR will pay the refund to the first filer, and vendors are not required to distribute any refunds to the original purchasers."
Pier 1 Imports has operated in Jefferson City since November 2001.