New York Attorney General Letitia James delivered a $150,000 check to the Yonkers City School District, the result of a settlement with Microsoft for overcharging sales tax on online orders to some New York customers.
Some of the tax overcharges affected Bronxville consumers who were collectively charged about $150,000 more than necessary; specifically, the charges were associated with purchases of Xbox products.
When making a purchase, consumers were asked to enter their full ZIP code +4. If they entered only the five-digit ZIP code and not the ZIP+4, Microsoft would still process the transaction, but would charge the customer the highest sales tax charged within the ZIP code.
Bronxille consumers were overcharged because their ZIP code, 10708, is shared by some areas of Yonkers, which has a higher sales tax than Bronxville. In Yonkers, the sales tax is 8.88%, whereas the sales tax in Bronxville is 8.38%.
The investigation was spurred by a complaint from a Bronxville consumer in January 2019.
“While Microsoft initially overcharged some customers for sales tax on Xbox products, we were glad to work with the company to swiftly correct this issue for our state”™s consumers,” said James. “No one should be forced to pay more in sales tax than they must, especially as we face a pandemic that has affected so many New Yorkers”™ wallets. I look forward to seeing this money put to good use for the children of Yonkers.”
In addition to the agreement that Microsoft institute a new order procedure to address the issue and ensure the application of the correct sales tax to all purchases, Microsoft also agreed to pay $150,000 to Yonkers city schools to supply resources to homeless students in the district.
The funding will support these students in necessary remote learning endeavors, including providing iPads, laptops, WiFi connectivity and assistive technology.
“This funding is much needed by the district to better support remote learning for homeless students, who are bearing the brunt of this pandemic in ways we cannot even imagine,” said Andrea Stewart-Cousins, New York state Senate majority leader. “Thank you to Attorney General Letitia James for fighting for our state and helping our most economically disadvantaged students by negotiating this settlement with Microsoft.”
