Sacramento County Businesses Erroneously Charging City of Sacramento Taxes

If you've made a major purchase or registered a vehicle within the past 14 months, you should probably check your receipt.  

The City of Sacramento has collected $33 million in Measure U transaction-and-use taxes from the State Board of Equalization since April of last year. But City Finance Director Leyne Milstein says that's too much.

"We have actually found ourselves in a place of over-receipt of cash that we know doesn't belong to us," she says.

For people living in the city, a half-cent tax is supposed to be applied to the purchase of a vehicle at the time of sale or when a vehicle purchased out-of-state is registered with the Department of Motor Vehicles.    

But, George Runner with the State Board of Equalization says businesses and DMV offices have failed to use the BOE's website to determine the correct amount of tax to charge.  

"So I know we have been in contact - our office directly - with the DMV pointing them to this tool and asking them to be sure to be able to use this to get the correct amount of tax," he says.

The tax also applies to leases, business-to-business transactions, and sales outside the city where the goods are delivered into the city on the seller's vehicle.

The BOE is currently sending letters to 689 businesses in the county that have improperly collected Measure U taxes.

Anyone with proof of overpayment can go to the retailer and ask for a refund. The retailer can then ask the BOE to be reimbursed. The BOE would then deduct that amount from future payments to the City.

But the BOE also says a retailer is not legally required to give you a refund.

The DMV says it does not know how many times it may have erroneously charged someone the City of Sacramento tax rate. It is aware of instances involving a few streets on the border of the city and unincorporated Sacramento County.

The department says it tries to ensure any overpayment is refunded to the taxpayer.