KSAT Defenders: Tax watchdog finds mistake at doughnut shop

State comptroller employee's mistake taxing to customers


WINDCREST, Texas – A Windcrest doughnut shop has now changed the way it taxes some purchases thanks to an alert customer who told the KSAT 12 Defenders about the problem.

When a brand new Dunkin' Donuts store opened in Windcrest, one of its first customers was Douglas Smith.

"I bought a dozen doughnuts and I brought them home and then I looked at the receipt and I saw I was charged tax on them," Smith said.

He knew from state tax laws that only individual doughnuts served for consumption in the store are taxed. A dozen doughnuts taken to go are not supposed to be taxed.

The KSAT Defenders went to the store and confirmed that it was indeed charging tax on doughnuts taken out of the store.

The manager was well aware of Smith's claims that tax was being applied wrongly and produced a message from the store's accountant.

The message quoted a Texas Comptroller's office employee, who told the shop to charge tax on doughnuts taken to go. That message turned out to be wrong.

In an emailed statement explaining what happened, a spokesman for the comptroller's office wrote: "The employee (who sent the wrong information) and other staff were reminded about the correct law that applies and the agency's rule about food is being updated."

The doughnut shop was then given the correct information about this taxing situation and stopped charging the tax.

And Smith has an answer for people who might say the few cents tax is not worth worrying about.

"Well, you start adding that up sale after sale after sale, and it turns into tens of thousands of dollars in a short period of time," Smith said.

For a list of recent stories Brian Mylar has done, click here.

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