11 Investigates: Are you being overcharged for your coffee?

You can find cold, caffeinated, canned and bottled coffee drinks just about everywhere. They are a multi-billion-dollar industry. But it’s possible the State of Pennsylvania has been getting a bigger slice of those profits than it should, and 11 Investigates found out you’re the one paying the price.

When you buy a coffee at your favorite cafe, you’re charged tax. It’s cut and dry, but the same doesn’t go for ready-to-drink canned or bottled coffee drinks.

“For some years now, I’ve been enjoying a Starbucks Double Shot coffee,” Paul Olkowski said.

Olkowski found out one store was charging tax, and the store right across the street wasn’t.

“It wouldn’t make any sense to me that one store has sales tax and the store across the street doesn’t,” Olkowski added.

11 Investigates decided to do our own experiment.

We got a copy of the PA Department of Revenue’s Retailer’s Information Guide. It provides guidance on how Pennsylvania sales tax applies to a variety of items, including prepared coffee drinks. The PA Department of Revenue says that while brewed or hot coffee is subject to PA sales tax, no matter if it’s sold at a restaurant or convenience store, cold coffee that is bottled and flavored is not subject to sales tax. Unless it is. 11 Investigates found out - it’s confusing.

At Sheetz and GetGo, we were not taxed on these prepared coffee drinks. The same goes for Target. There was no sales tax for the prepared coffee drinks we bought there. But at locally owned grocery store, Kuhn’s, we were charged 21 cents in tax, but only for one of three coffee drinks we bought - a Monster Java. We reached out to Kuhn’s. They tell 11 Investigates energy drinks, like Monster, are taxable if they’re more than four ounces.

So, one coffee drink is taxable, another is not. It’s written in Pennsylvania law.

David McGarry with the nonprofit, Taxpayers Protection Alliance, says state tax laws are confusing for consumers and sometimes retailers.

“Stories like this one are indicative of a larger problem,” McGarry said. “When you have a tax code that has all sorts of carve-outs and exemptions, it becomes incredibly difficult for business owners and consumers to know when to charge a tax and when not to.”

McGarry says the problem is so complex and time-consuming that it would be nearly impossible for state legislators to fix it.

“Taxes should be as simple and clear, and evenly applied as possible,” McGarry added.

What can you do if you are charged tax on an item that’s tax-exempt? Bring it to the attention of management and ask them to fix it. If that doesn’t work, you can file a petition online for a refund with the Department of Revenue’s Board of Appeals. You must submit proof with a receipt.

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