Hess To Stop Charging Sales Taxon Refundable Beverage Container Deposits

Attorney General Spitzer today announced a settlement with Amerada Hess Corporation over allegations that its Hess Express convenience stores were improperly collecting sales tax on refundable beverage container deposits.

The Attorney General's office commenced an investigation after receiving a complaint that a Hess Express store in Tarrytown was charging sales tax on refundable beverage container deposits. A subsequent review by the Attorney General's office confirmed that Hess, a Delaware corporation, had also collected sales tax on beverage container deposits at a Hess Express store in Brooklyn.

Under New York State's Returnable Container Act (RCA), a consumer pays a deposit when purchasing certain beverages, and gets the deposit back when the beverage containers are returned. The five cent deposit is not subject to state or local sales tax.

"Every penny counts, and consumers should not be required to pay sales tax on nontaxable items such as beverage container deposits," Spitzer said.

The Attorney General's investigation also uncovered that Hess was overcharging consumers for sales tax by applying an incorrect sales tax rate at two of its Hess Express stores.

In settling the case, Hess agreed to:

• Provide refunds to all individuals who provide proof they paid sales tax on beverage container deposits;
• Post signs in the affected locations advising customers of the availability of the refund program;
• Notify its Hess Express stores in New York that sales tax cannot be collected on beverage container refundable deposits;
• Notify its Hess Express stores in New York of the applicable sales tax rate for each location;

Hess also agreed to pay $6,329.49 to the Attorney General in civil penalties and costs.

The case was handled by Assistant Attorney General Doris K. Morin with the assistance of Detective Sergeant John Fox of the Irvington Police Department Detective Bureau and under the supervision of Gary S. Brown, Assistant Attorney General in Charge of the Westchester Regional Office