13.3 percent sales tax? New outlet mall clears up confusion - KPTV - FOX 12

13.3 percent sales tax? New outlet mall clears up confusion

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Ted Phipps (Source: KPHO-TV) Ted Phipps (Source: KPHO-TV)
(Source: KPHO-TV) (Source: KPHO-TV)
PHOENIX (CBS5) -

Customers were outraged after at least one of the stores at a brand new outlet mall in the Phoenix area accidentally overcharged in sales tax.  

Ted Phipps went to Phoenix Premium Outlet's grand opening last Thursday looking for a bargain but says most of his savings were eaten up in sales tax. 

He showed CBS 5 News his receipt. His purchase was $246, but it shot up to about $278.72 after taxes.

"Well I was kind of shocked," Phipps said. "As soon as he printed it out, I noticed it and I asked him, 'What's this with 13.3 percent?'" said Phipps. 

According to the folks at Tommy Bahama, there was a system error in the cash registers.

Officials said the stores at Phoenix Premium Outlet are supposed to charge 8.8 percent in sales tax.  Outlet management is now working to make sure all of the stores are collecting the right amount.

Officials at Phoenix Premium Outlet sent CBS 5 News a statement that read in part:

"While each store is responsible for its own transactions, we are checking with each merchant to ensure the proper tax rate is being charged. If any store is in error, we will work to see this is rectified as soon as possible."

Phipps told CBS 5 News he was able to contact guest services at Tommy Bahama and the store is working to repay him the money he was overcharged.

The Gila River Tribe issued this statement:

"The combined taxes applicable to retails sales at the Phoenix Premium Outlets are comparable to the combined tax rates imposed in neighboring Valley cities. However, there is a small net difference in the transaction privilege tax applied to retail sales to tribal members of the Gila River Indian Community and retail sales to non-tribal members.

"In general, under Federal Law, state governments may impose sales tax on retail sales within Indian reservations if the transaction involves a non-tribal member merchant and a non-tribal member purchaser unless the tax is otherwise preempted by Federal Law. The merchants at Phoenix Premium Outlets are non-tribal members and therefore any retail sale to a non-tribal member is subject to the state transaction privilege tax. However, the application of the state transaction privilege tax on retail sales to tribal members on the Gila River Indian Reservation is preempted by Federal Law.

"The Gila River Indian Community, itself, also taxes all retail sales at the Phoenix Premium Outlets regardless of whether the purchaser is a tribal member of the Community or a non-tribal member. However, the City of Phoenix and City of Chandler transaction privilege and other taxes do not apply to retail sales at Phoenix Premium Outlets since they have no jurisdiction to tax activities that occur within the Reservation.

"Therefore, the applicable government taxes regarding retail sales to non-tribal members at the Phoenix Premium Outlets include: Arizona and Maricopa County's transaction privilege taxes (approximately 7.3 percent combined), and the Gila River Indian Community's transaction privilege tax which is reduced to 1.5 percent as applied to non-tribal member purchases. Therefore the total transaction privilege tax on a sale to a non-tribal member at the Phoenix Premium Outlets is 8.8 percent. Only the Gila River Indian Community has authority to tax sales on tribal members within the Reservation. The total transaction privilege tax on a sale to tribal members at the Phoenix Premium Outlets is 6.0 percent."

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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