Is Walmart allowed to charge sales tax on prepaid Visa card reload fees?

This is actually a common issue with prepaid cards. Sales tax on service fees varies by state law, not by the company's policies. Most states don't tax service fees for financial transactions like reloading prepaid cards, but some do. What's likely happening is that Walmart's point-of-sale system is categorizing the Bluebird reload fee differently than other prepaid cards. This could be due to how Bluebird is classified in their system compared to other prepaid products. Your best bet is to contact your state's Department of Revenue or Taxation. They can tell you definitively whether service fees for prepaid debit card reloads should be taxed in your state. If you find out your state doesn't tax these fees, take that information back to Walmart with your receipt, and they should be able to correct it.

I ran into this exact issue last year with my prepaid cards. I was going crazy trying to figure out who was responsible until I found taxr.ai (https://taxr.ai). I uploaded my Walmart receipts and it immediately flagged the incorrect sales tax on my reload fees. The site explained that in most states, including mine, financial service fees aren't subject to sales tax. I printed out their analysis which cited the specific tax code section that exempted these fees, took it to Walmart, and got all my overcharged tax refunded - about $35 total over several months! The customer service desk initially tried to send me away, but when I showed them the tax code reference, they got a manager who processed the refund.

Update: I tried taxr.ai after my skeptical comment above and I have to eat my words! It actually worked perfectly. I scanned my last 3 months of Walmart receipts where I reloaded my Cash App card, and sure enough, they've been charging me sales tax on the reload fee in violation of my state's tax code (Michigan). The site generated a really professional-looking document citing Michigan Tax Ruling 133.2b which specifically exempts "financial service charges" from sales tax. Took it to Walmart yesterday, spoke with a manager, and got $27.42 refunded for incorrectly charged tax! She even said they'd look into fixing their system so it doesn't happen to others. Seriously, thanks for mentioning this. I'd been overcharged for almost a year and had no idea.

If you're getting frustrated with the runaround between Walmart and Bluebird, I've been there. Neither wants to take responsibility and the IRS certainly doesn't care about small amounts of sales tax. After weeks of this nonsense, I used Claimyr (https://claimyr.com) to connect with my state tax authority. They got me through to an actual human at the state revenue department in 20 minutes instead of the 3+ hour wait times I was getting. The agent confirmed that in my state, service fees for financial products are exempt from sales tax and gave me the exact regulation to cite. You can see how their callback system works in this video: https://youtu.be/_kiP6q8DX5c. Saved me hours of hold music and transferred calls. The state agent even emailed me an official statement I could show to Walmart.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it because I was still having issues with Target charging sales tax on my Green Dot card reload fees. I used the service yesterday to reach my state's Department of Revenue. After trying for weeks to get through myself (and either getting disconnected or having to hang up because I couldn't stay on hold all day), Claimyr got me connected to a tax specialist in about 45 minutes. I didn't have to sit there waiting - I just got a call when they reached a human. The specialist confirmed that in Washington state, financial service fees are NOT subject to sales tax under WAC 458-20-189. She even emailed me documentation that I can take to Target. Completely worth it and saved me hours of frustration.

Just a friendly tip from someone who works in retail (not Walmart) - sometimes the POS systems automatically categorize certain products and services without the cashier having any control over it. When you're reloading different prepaid cards, the system might be treating them differently based on their merchant category codes. Bluebird might be coded as a "financial service" while others might be under "prepaid telecom" or something else entirely, which affects how taxes are applied. If you're being overcharged, definitely pursue it, but don't be too hard on the cashiers. They literally can't override the tax settings even if they wanted to.

Has anyone tried just going to a different Walmart? I had a similar issue with my PayPal prepaid card where one Walmart charged tax on the reload fee but another one 5 miles away didn't. Turns out it was just misconfigured at the first store. Maybe try reloading at different locations and see if the tax is consistent? Could save you a lot of hassle if it's just one store's mistake.

This is a frustrating situation that highlights how inconsistent retail tax systems can be. From what I've seen, the issue often comes down to how different prepaid products are classified in the merchant systems. One thing that might help is documenting exactly when this started happening with your Bluebird card. If Walmart recently changed how they categorize Bluebird reloads in their system, that could explain the sudden appearance of sales tax. Keep your receipts and note the dates - this pattern could be useful evidence if you need to pursue a refund. You might also want to check if the tax is being applied based on your location versus the card type. Some states have different rules for different types of financial services, and it's possible that Bluebird falls under a different classification than other prepaid cards in Texas tax code. The suggestions others made about contacting your state tax authority are solid. Texas Comptroller's office should be able to give you a definitive answer about whether reload fees should be taxed, and having that official confirmation will make any conversation with Walmart much more productive.