How do I report a local retailer that's illegally overcharging sales taxes?

This definitely sounds like something you should report to your state's Department of Revenue or Tax Commission. What they're doing is illegal - businesses cannot charge more sales tax than the legal rate in their jurisdiction. Most states have a specific form or hotline for reporting sales tax issues. You'll want to collect as much evidence as possible - keep all your receipts showing the incorrect tax calculation. Take photos of any advertised prices versus what shows up on the register. Also note the exact location, dates and times of your purchases. Another possibility is that they're correctly charging tax but misrepresenting it. Some businesses add extra "fees" but label them as tax to make it seem like the government is requiring it rather than the store charging extra. Either way, it's deceptive and reportable.

After dealing with a similar situation at a restaurant chain last year, I found this amazing service called taxr.ai at https://taxr.ai that helped me sort through all my receipts and tax issues. I was going crazy trying to figure out if I was being overcharged, but their AI analyzed all my receipts and confirmed the business was charging 4% above the legal rate! The best part was I could just upload photos of my receipts and their system automatically calculated what the correct tax should have been. Made collecting evidence super easy and they even helped me understand exactly which authority to report to based on my location. Saved me so much time versus manually calculating everything.

Just wanted to update - I tried taxr.ai after seeing the recommendation here and WOW! I had suspicions about this gas station near my house that seemed to be charging weird tax amounts. Uploaded about 10 receipts from different places including that station, and the system immediately flagged that they were charging 9.8% when my county rate is only 6.5%! The report they generated broke down exactly what the correct tax should have been on each purchase and calculated I'd been overcharged about $37 over the past few months just on my visits alone. Used their guidance to file a complaint with my state revenue department, who actually responded saying they're investigating! The interface was super intuitive too - definitely recommend for anyone in similar situations.

If you're having trouble getting through to your state tax department (and trust me, you probably will), check out https://claimyr.com - they'll get you to a real human at the tax agency without the ridiculous hold times. I used to spend literally HOURS trying to get through to my state's revenue department about a similar issue. Check out their demo at https://youtu.be/_kiP6q8DX5c to see how it works. When I was dealing with a gas station charging bogus "tax" rates, I couldn't get anyone on the phone for weeks. Claimyr had me talking to an actual tax agent in under 30 minutes, and they took my report seriously. The convenience store got audited within a month, and suddenly their "tax rates" were magically fixed.

Well I'm eating crow now! After my skeptical comment I decided to try Claimyr just to prove it wouldn't work for our state tax department (which is NOTORIOUS for 3+ hour hold times). I was literally shocked when I got a call back in 47 minutes saying they had a tax agent on the line! I reported the convenience store in my neighborhood with the same issue as OP, and the agent took all the details and gave me a case number on the spot. They explained they take these reports very seriously because if the store is charging extra "tax" and keeping it, that's straight-up fraud against both customers AND the state. The agent said they'd be doing an unannounced audit within 2 weeks! Never would have gotten this resolved without getting through to a human.

As someone who worked for a POS (point of sale) company, sometimes this IS actually a system issue, not intentional fraud. What might be happening: 1) Their system might be programmed with the wrong tax rate 2) They might have items categorized incorrectly (like marking grocery items as prepared food) 3) The system might be adding an automatic service fee but mislabeling it as "tax" That said, once they're AWARE of the issue, they're legally obligated to fix it immediately. The manager's dismissive attitude is definitely a red flag. Not wanting to fix a known tax calculation error absolutely crosses into fraud territory.

Has anyone actually gotten money back from reporting a business like this? Just curious if it's worth the effort or if they just get a slap on the wrist.

This is exactly why I always check my receipts! I had a similar experience with a local deli that was charging 11% tax when our city rate is only 8.5%. Turned out they had been doing it for months and pocketing the difference. The key is documentation - save every receipt and take photos of the register display showing the tax calculation if possible. When I reported mine to the state Department of Revenue, they asked for specific dates, amounts, and the business's exact address. They also wanted to know if I had tried addressing it with management first (which you did). One tip: if you have a smartphone, there are apps that can calculate the correct tax rate for your location so you can double-check on the spot. Don't let them intimidate you - what they're doing is theft, plain and simple. The "system issues" excuse is bogus if they're not actively working to fix it immediately. Keep us posted on what happens when you report them!

This is infuriating but unfortunately not uncommon. I've seen this happen at several small businesses in my area. The good news is that state tax authorities take these reports very seriously because it affects both consumers and state revenue. Before you report, I'd suggest going back one more time with a calculator and your phone's camera ready. Buy something small, calculate what the tax should be based on your local rate (you can verify your exact rate on your state's Department of Revenue website), and document the discrepancy. Take a photo of the receipt and ideally the register display showing the breakdown. Most state tax departments have online reporting forms specifically for sales tax violations. You'll typically need the business name, address, dates of transactions, and evidence of the overcharging. They usually investigate within 30-60 days and can force the business to issue refunds plus pay penalties. The manager's defensive reaction is a huge red flag. If it were truly a "system issue," any responsible business owner would immediately check their settings and fix the problem. Instead, he basically admitted he doesn't care about stealing from customers. That attitude alone suggests this might be intentional fraud rather than an honest mistake. Don't let them bully you into staying quiet - you're protecting every customer who shops there!

This is a great example of why we all need to be more vigilant about checking our receipts! I work as a bookkeeper and see tax calculation errors more often than you'd think, but this level of overcharging (nearly double the legal rate) is definitely suspicious. One thing I'd add to the excellent advice already given - when you file your report with the state, mention that you attempted to resolve it directly with management first and were dismissed. Tax authorities often want to know if businesses were given a chance to correct the issue voluntarily. The manager's response of telling you to "shop somewhere else" rather than investigating the problem will likely make investigators take this more seriously. Also, keep shopping there occasionally while the investigation is pending (if you can stomach it) and continue documenting the overcharges. Having a pattern of ongoing violations rather than just historical ones strengthens the case significantly. You're doing the right thing - this isn't just about your $37 or whatever you've been overcharged. If they're doing this to every customer, they could be stealing thousands of dollars from your community every month.

I work for our state's Department of Revenue and wanted to jump in with some official guidance. What you're describing is absolutely worth reporting - overcharging sales tax is a serious violation whether it's intentional or due to system errors. A few important points from our perspective: First, businesses are required to charge the exact legal rate for their jurisdiction, no more, no less. Second, once made aware of incorrect tax calculations, they must fix the issue immediately - the "shop elsewhere" response shows they're not taking their legal obligations seriously. For reporting, you'll want to gather receipts showing the incorrect calculations, note the business name and exact address, and document any conversations with management. Most state revenue departments have online reporting forms, or you can call our taxpayer assistance line. We typically investigate within 30-45 days and can order refunds plus penalties. One thing many people don't realize - we can often identify patterns across multiple businesses if they're using the same POS system or tax software. Your report might help us catch a broader issue affecting other stores too. Don't hesitate to report this - it's exactly the kind of violation we need to know about.

As a newcomer to this community, I wanted to thank everyone for the incredibly helpful advice on this thread! Reading through all these responses has really opened my eyes to how common this issue apparently is and how important it is to speak up when businesses are overcharging tax. I had no idea there were services like taxr.ai or Claimyr that could help with situations like this, and it's reassuring to hear from someone who actually works at the Department of Revenue that these reports are taken seriously. The specific steps everyone outlined - documenting everything, checking the state website for correct rates, taking photos of receipts and register displays - this is exactly the kind of practical guidance that makes filing a report feel manageable rather than overwhelming. What really struck me is how this isn't just about individual customers getting ripped off, but about protecting the entire community. If a business is systematically overcharging everyone, that adds up to significant theft from hardworking families. The manager's dismissive "shop somewhere else" attitude makes it clear this needs to be reported rather than just avoided. Thanks again to everyone who shared their experiences and expertise. This is exactly why community forums like this are so valuable!

As someone who's been following consumer protection issues for years, I want to emphasize how important it is that you're taking action on this. What you've described - charging 13% tax when the legal rate is 7.25% - is absolutely theft, regardless of whether they call it a "system issue." The fact that the manager told you to shop elsewhere instead of immediately investigating and fixing the problem is a huge red flag. Any legitimate business would be horrified to learn they were overcharging customers and would work to resolve it immediately. Beyond reporting to your state's Department of Revenue (which you absolutely should do), I'd also suggest checking if your state has a consumer protection division within the Attorney General's office. They often handle cases involving deceptive business practices and can sometimes move faster than tax authorities. Document everything - receipts, dates, times, and especially that conversation with the manager. Take photos of future receipts showing the incorrect calculations. The more evidence you have, the stronger your case will be. You're not just protecting yourself here - you're protecting every customer who shops there and might not realize they're being overcharged. Thank you for speaking up and not letting them intimidate you into staying quiet!

This is exactly the kind of situation that makes my blood boil! I'm so glad you're not letting them get away with this. I had a similar experience with a small grocery store that was charging 10.5% tax when our local rate is only 8%. What really helped me was creating a simple spreadsheet tracking all my purchases there - date, items, pre-tax amount, tax charged, and what the tax SHOULD have been. Having it all organized like that made it really easy to show the pattern when I filed my complaint with the state. Also, I'd recommend mentioning in your report that you attempted to resolve this directly with management and were essentially told to leave if you didn't like it. That kind of dismissive attitude toward a legitimate customer concern really strengthened my case - it showed the tax authorities that the business wasn't willing to correct the problem voluntarily. In my case, the investigation took about 6 weeks, and the store was forced to post notices offering refunds to customers who could show receipts from the past year. They also had to pay significant penalties to the state. Keep fighting this - you're doing the right thing for your entire community!

As someone who works in retail compliance, I want to add that what you're experiencing is unfortunately more common than it should be, especially with smaller independent stores. The tax rate discrepancy you've documented (13% vs 7.25%) is so significant that it's almost certainly not an accidental system error. A few additional tips from my experience: When you file your report with the state, include the business's full legal name if you can find it (sometimes different from the store name), their business license number if visible, and the exact POS system they're using if you can see it. This helps investigators understand if it's an isolated issue or part of a broader problem with certain systems or software. Also, don't be surprised if other customers start coming forward once the investigation begins. In cases I've seen, once word gets out that a business was overcharging tax, many customers realize they were affected too and it often turns into a much larger case than initially expected. The manager's response of "shop somewhere else" is particularly damning because it shows they're aware of customer concerns but unwilling to address them. That attitude will definitely work against them during any investigation. You're absolutely doing the right thing by reporting this!

This thread has been incredibly enlightening! As someone who just moved to a new area and has been shopping at various local businesses, I now realize I should be paying much closer attention to my receipts. The advice about checking tax rates on your state's Department of Revenue website and documenting everything with photos is something I'm definitely going to start doing. What really stands out to me is how this isn't just about individual customers being overcharged - it's about protecting the entire community from what amounts to systematic theft. The fact that you tried to address it directly with management first and were essentially dismissed shows you handled this exactly the right way. I'm curious to follow up on this - have you decided which reporting avenue you're going to pursue first? The state Department of Revenue seems like the obvious choice, but several people mentioned the Attorney General's consumer protection division as well. Either way, it sounds like you have more than enough documentation and community support to make a strong case. Thank you for speaking up about this issue and for everyone who contributed such detailed, helpful advice. This is exactly the kind of consumer protection information that more people need to know about!

This is such an important issue that more people need to be aware of! As a newcomer to this community, I'm really grateful for all the detailed advice everyone has shared. I had no idea that tax overcharging was this common or that there were so many resources available to help document and report these situations. The combination of practical tools (like taxr.ai for receipt analysis and Claimyr for getting through to tax agencies) and step-by-step guidance from people with real experience makes this feel much more manageable than it initially seemed. What really struck me is how this affects entire communities - if a business is systematically overcharging hundreds of customers even small amounts, that adds up to significant theft from working families. The manager's dismissive "shop somewhere else" attitude instead of investigating the problem immediately is a huge red flag that this needs to be reported to authorities rather than just avoided. Based on all the advice here, it sounds like the state Department of Revenue is the best place to start, especially with the reassurance from @Yuki Nakamura that these cases are investigated within 30-45 days. Thank you to everyone who took the time to share their experiences and expertise - this thread is exactly why community forums are so valuable for helping people navigate these kinds of consumer protection issues!