Dollar General corrects sales tax overcharge

Dollar General’s corporate office has corrected software information in two Farmington stores that had added an extra percent in sales taxes to nonfood items.

The incorrect tax rate had been in the store computers since Aug. 1. A spokesman for the store’s corporate office said the problem was resolved by mid-afternoon on Wednesday.

Last week, Farmington resident Howard McKenna noticed that the two Dollar Stores in his city had charged him 9 percent in sales taxes instead of the proper tax of 7.975 percent. McKenna contacted City Clerk Paula Cartee, the state revenue department and State Sen. Kevin Engler, R-Farmington. Cartee called Dollar General’s corporate office and told them to change the computerized registers. She also sent a letter.

On Friday, food items at the two stores were charged to the correct sales tax rate. However, nonfood items were still being charged the higher price as of Wednesday morning.  Before noon, a Daily Journal reporter bought a $1 children’s activities book from each of the Dollar General stories in St. Francois County. Leadwood’s cost, including tax, was $1.07, while the cost in Park Hills, Bonne Terre and Desloge was $1.08.  Farmington’s stores each charged $1.09.

That afternoon, Cartee told the Daily Journal that the Dollar General corporate office had called her to say that the problem had been corrected about 2:30 p.m.

Tawn Earnest, senior director of corporate communications for Dollar General explained how the problem occurred.

Tax rates are loaded into the stores’ computers at the beginning of each month. In August, the software company that provides the rates to Dollar General adjusted the rates to reflect a special Community Improvement District, or CID in Farmington. However, neither Dollar General store is located in that district.

An employee at corporate offices noted that the rate should be changed for the Farmington stores. However, no one saw the note and the software was not amended. Staff learned of the problem Wednesday, when Cartee’s letter arrived.

“When we were alerted that a mistake had been made, we corrected it immediately,” Earnest said Wednesday night. “That’s what happened today. It was an honest mistake and we have corrected it.”

Sales tax money goes straight to the state’s Department of Revenue, including the overcharge, she added. The money from the extra percent charged customers in August and the first part of this month has not yet been calculated, but that amount will be earmarked for Farmington on the state records, she explained.

According to the Department of Revenue, businesses remit state and local sales to the Department, which then distributes the local sales taxes to the respective cities, counties and districts.

Paula Barr is a reporter for the Daily Journal and can be reached at 573-431-2010, ext. 172 or at pbarr@dailyjournalonline.com.