OK, this is just a small thing, but every little bit helps.
Aramark is the commissary vendor for Clark County (Las Vegas, NV) Detention Center. They sell iCare packages for LO's to send to inmates. They charge sales tax on the packages.
Nevada does not tax groceries. I've pursued this enough with Aramark and the Nevada Department of Taxation to where I have a written opinion from NDOT that the packages should not be subject to sales tax.
I just got this letter today and contacted someone in Aramark's corporate compliance department. Unless I've horribly mucked up the information I provided to NDOT and there's some reason the packages should be taxable, they should both stop charging tax and make refunds.
I'm posting this here in case (a) anyone has more insight than I do into next steps, specifically getting them to refund improperly collected taxes; and (b) anyone has LO's in other facilities where Aramark is improperly charging sales tax.
I suspect that Aramark will probably review it themselves. I've worked with a lot of compliance folks over the years. Some in smaller companies are paid to sweep stuff under the rug to protect senior management, but most are basically good people trying to do the right thing.
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Are ALL items in the 'packages' considered to be groceries under the State Tax Code? That will impact any potential changes.
By example, here in Texas, if I go to the store, there are some food items that are taxed and some that are not taxed. I don't recall the specific distinction but for some reason it sticks in my mind that single-serve items and junk food are taxable while packaged multi-serve items were not. It was more complex than that, but those are the basics that I recall. I never really worried about it since the amounts are nominal and I don't do my shopping based on what is taxed and what is not...
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Some packages are mixed, like a few that have candy bars and shampoo.
Most are exclusively grocery items. Some states tax candy and soda, but Nevada does not.
Nevada taxes food if sold with plates, napkins, or utensils. However, none of the packages include that. NDOT asked me about tuna, like how would it be prepared. I found that inmates can purchase a bowl from commissary and are allowed to keep the spoons from their meal trays.
NDOT reviewed the package contents and the relevant regulations and sent me a letter stating that, based on the information provided, they weren't taxable.
Obviously the rules would vary from state to state. States that tax candy or sweetened drinks would probably have many more packages that have taxable items. On the other hand, packages that are prepared "a la carte" would presumably be taxed only on the taxable items contained.
Based on a conversation I had with Aramark's associate general counsel (in other words, a staff lawyer), they've agreed the packages should be non-taxable. They are still charging sales tax; they said the programming change to remove the sales tax is non-trivial.
I'm anticipating that refunds will also be non-trivial. For example, in my case I no longer have the credit card I used to buy them with. And I don't know how long this has been going on; probably as long as Aramark has been the commissary vendor.
I still don't know why this took me so long to realize. Then again, no one ever thought about gravity until an apple fell on Isaac Newton's head. (Or so the legend goes.)
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