Kansas Sampler in downtown Lawrence has been charging extra 1 percent in sales tax on purchases

The owner of Kansas Sampler, 921 Mass., says the store has been charging 9.85 percent sales tax on purchases. The legal rate for the downtown area is 8.85 percent.

An “embarrassing” sales tax mistake has caused shoppers at the Kansas Sampler in downtown Lawrence to be overcharged for their purchases likely for the last six months, the owner of the store confirmed Monday.

Shoppers at Kansas Sampler, 921 Mass., have been paying a 9.85 percent sales tax on purchases, even though the legal rate for the downtown area is 8.85 percent.

“We’re pretty embarrassed about it,” said Aaron Liebert, an owner of the chain, which operates in seven other cities. “I don’t know if it was a bookkeeper or a clerk, but somebody programmed the wrong number into the cash register. It is not a conspiracy by any means. We’re not trying to bilk money out of our customers.”

Liebert, though, acknowledged that the extra sales tax collections were not being sent in to the state of Kansas. He said that only the cash registers at the store were programmed incorrectly. The company’s accounting software was programmed with the 8.85 percent rate, which is what the company used when calculating how much sales tax to send to the state each month.

“I’m embarrassed that I don’t have a better answer for any of this,” Liebert said. “I’m just glad that it has been caught, but it shouldn’t have happened.”

The mistake, though, has left some customers upset. Lawrence resident Laura Green noticed the extra sales tax shortly after she spent about $70 at the store on Saturday. She called the store Monday morning to point out the error.

Green said an assistant manager at the store told her that there was no mistake, but rather that downtown Lawrence was part of a special taxing district.

Green called a City Hall official who confirmed there is no special sales tax for downtown. Green called the store again but was still told she had not been overcharged. The Journal-World contacted the store at about 2 p.m. By about 2:30 p.m., Liebert called to explain the situation and said the correct rate had been programmed into the cash registers.

Liebert still was trying to determine when the faulty rate was entered into the system, but he said it likely was on July 1 when the new statewide sales tax increase took effect.

Green said she wasn’t particularly impressed with the company’s explanation about how such a mistake could exist for nearly six months.

“I can’t believe I’m the first person to point this out to them,” Green said. “They either have a really poor accounting method, or they are just collecting extra money as revenue.”

Liebert said Monday was the first time the tax issue had been brought to his attention. He said he was not sure where the assistant manager got his information that downtown was part of a special taxing district.

Liebert said customers who have a receipt showing they were overcharged will be issued a refund if they bring the receipt to the store. Refunds will be more difficult for customers who no longer have a receipt, he said. Refunds may be possible to customers who have signed up for the company’s rewards program because those purchases are tracked on the store’s computer system. Others without a receipt, however, may not get a refund.

Liebert originally said the company would donate any of the wrongly collected money to a local charity if it couldn’t be refunded. But a leader with the Kansas Department of Revenue said that is not how the system works. Steve Stotts, director of tax operations, said any money collected as sales tax — even if done so in error — must be turned over to the state.

Stotts said the store can issue refunds and will be reimbursed by the state if the appropriate documentation is provided. Any money that is not refunded will remain in the state’s bank account.

“It is an error, but it is still state money,” Stotts said.

Liebert said he didn’t yet have an estimate for the amount of money incorrectly collected, but he said it likely was “several thousand” dollars.

Stotts said the state does run into such mistakes on a semifrequent basis.

“It is probably a little more frequent than you would hope,” Stotts said. “That’s particularly true in the Johnson County and Wyandotte County area where there are a lot of different sales tax rates in play.”