Tax Increase Causing Problems For Retailers

Matt Reynolds,
Matt Reynolds,
Reimar Muniz
Reimar Muniz

(KHNL) - For many of us, the new year means new resolutions.

But local retailers have to get used to new changes to the state's general excise tax. An increase that started with the new year is already causing problems for some stores.

With stores still busy with the holiday atmosphere, it's easy to miss a half percent.

"We didn't even notice it until you brought it to our attention," said April Cordell, assistant manager at Nicky Shoe Company. "We knew of the new tax increase, but the computer does it automatically."

The excise tax went from 4.167 to 4.712 on January 1st.

"It was really just changing the number in the computer, then software would take over," said Matt Reynolds, manager at Hanai Bear.

"We haven't had any problems with that at all," said Cordell.

But the problem with Christmas refunds is they were bought under the old rate.

For example, a $19.99 gift costs $20.93 this year. It was $20.82 last year. Stores are double checking to make sure they don't credit customers with the new rate.

"We make our adjustments to whenever the product was purchased from last year and also this year," said Reimar Muniz, general manager at Razor Concepts. "But for the most part, people have just been exchanging items, so it's been even."

"It can get a little time consuming," said Reynolds. "The worst part is for the customer. It kinda takes time out of their schedule."

Store managers admit the difference is small, but it would add up over time. And giving away all those dollars, just isn't good business sense.

Most stores have 30-day return policies, so they shouldn't have to deal with the quirk too much longer.