I was wrongly charged sales tax. How do I get a refund?

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Q. I live in New Jersey and I was recently charged sales tax from an online merchant for tax-exempt items like clothing. I reached out to the merchant for a refund and was basically told that the vendor they use forces them to charge the tax. They are not interested in providing me with a refund even though I’ve sent them the guidelines that say otherwise. Is there a formal process I can follow to ensure I receive a refund?
— Shopper

A. We’ve heard this story before.

With online purchases and sales tax being determined by state law, it’s all too common.

Technically, it is the business’ responsibility to do the right thing, said Kenneth Bagner, a certified public accountant with Sobel and Co. in Livingston.

There is a process, he said, but it’s not a simple one.

Refund claims of sales and use tax must include documentation of all transactions, he said.

Here’s what’s required:

The claim for refund, Form A-3730, must be filed with documents, such as invoices, receipts, proof of payment of tax, and exemption certificates, the state says.

“These documents must be provided in a format suitable to determine the correctness of the grounds for the refund and the amount of the refund or credit,” it said. “Acceptable formats include photocopies or in lieu of paper copies, imaged documents.”

Here comes a mouthful.

“All sales/purchase documentation must clearly identify the seller, purchaser, invoice number, invoice date, description of the transaction, amount of the invoice excluding the tax, and the amount of sales tax billed for the transaction,” it says. “For those transactions exempt from sales tax by the tendering of an exemption certificate, the documentation relevant to all transactions with the issuer of the exemption certificate must clearly identify the purchaser.”

Cash receipts, register tapes or other receipts that do not identify the purchaser are not acceptable, it said. Proof of sales tax remitted to sellers is required and the state will accept copies of canceled checks, it said.

If payment was made electronically, you can send copies of bank statements with an itemization of all the transactions that make up the electronic payment.

“The best bet is to push the company for a refund first though as this process looks painful,” Bagner said.

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This story was originally published on March 23, 2022.

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