According to a report from the Reporter Newspapers, Home Depot is the latest major retailer that was found incorrectly charging a higher Atlanta sales tax within the city of Sandy Springs.
This represents another example of ZIP code confusion which local officials worry could result in misapplied sales taxes.
The problem is derived from the fact that Sandy Springs’ ZIP code is 30328, which the United States Postal Service labels as “Atlanta” even though it is outside of Atlanta. The software that companies use automatically calculates sales tax on purchases based on ZIP codes. However, this software can get the information wrong in local cities without the proper customization of data. Some systems won’t even let customers enter in the correct city name in online orders.
The city of Atlanta’ sales tax is 8.9 percent. In Sandy Springs, it’s 7.75 percent. Since 2017, the Reporter discovered that the Starbucks on Peachtree-Dunwoody Road used the Atlanta tax rate incorrectly. It later corrected this system. In another instance, local online orders from the promotional product subsidiary of office supply company Staples were also found charging Atlanta sales taxes. Although the customer was refunded, Staples did not state whether they would fix the underlying problem at hand.
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This latest case involves several delivery orders from the Home Depot at 6400 Peachtree-Dunwoody Road. The store charged the correct local sales tax for over-the-counter purchases, according to a confirmation the Reporter made during a recent visit. The issue arose with a delivery order.
The Reporter went into further detail about this mistake:
On Aug. 21, customer Bob Sustak made a purchase there of a new oven at a cost of $3,239.10, with the appliance to be delivered to his home. He realized that the sales tax charge of $288.28 was based on the Atlanta rate. That’s an overcharge of $37.50 from the correct Sandy Springs rate.
A spokesperson from Home Depot, Margaret Smith, said the company “corrected” Sustak’s problem and added, “We think that this is an isolated incident.”
Smith notes that according to Georgia law, the sales tax on delivery orders is based on the delivery location, not at the store where the order is conducted. According to Smith, the oven that Sustak ordered, was delivered across a border into “Atlanta.”
However, Sustak’s home is located in Sandy Springs, which is in the same 30328 ZIP code that the Home Depot store is located in. The ZIP code is well within the city of Sandy Springs, not Atlanta. When Smith was informed about this fact, she said she would have to do more investigation on the matter, but ultimately did not respond to the Reporter’s deadline.
This case is just one of many instances where tax system in the U.S. end up hurting everyday people. This serves as a reminder of the need for more simplified and less burdensome systems of taxation that are free from bureaucratic error.