New York might have failed in its efforts to tax sugary sodas but that didn’t keep retail giant Walmart from trying to tax it anyway.  This week, New York Attorney General Eric T. Schneiderman announced that the state reached a settlement with Wal-Mart Stores Wal-Mart Stores, Inc. (also known as Walmart) over false advertising claims. The settlement followed an investigation into claims that Walmart advertised a sale on Coca-Cola Coca-Cola soft drinks but actually charged customers across New York State more than the advertised sale price.  The sale in question was a Father’s Day sale, which touted 12-packs of Coca-Cola products for just $3.00 – a pretty good price. However, when Walmart customers in the State of New York attempted to buy Coca-Cola products, they were charged $3.50, more than 15% over the sale price. When customers complained about the difference, Walmart employees remarkably told customers that the difference reflected New York’s “Sugar Tax.” You know, the one that doesn’t exist.  And Walmart kept doing it. It turns out that the cash registers were programmed, according to the Attorney General’s Office, not to recognize the sale price. But rather than take corrective action when the error was brought to the company’s attention by its customers, Walmart employees simply lied about it. Over and over. All while the retailer was pocketing the difference. That is, until the Attorney General got involved. Like magic, once the Attorney General’s Office contacted Walmart, the price was adjusted to the amount as advertised.  You’d think this was just a fluke. But it turns out that this isn’t an isolated incident. Walmart had similar complaints just three months before this incident – and again failed to adjust the price until the Attorney General stepped in. Apparently, that’s the best way to get the retailer’s attention.  In total, Walmart sold 66,000 12 packs of Coca-Cola products – or nearly 800,000 individual sodas – at the inflated price. That, says the Attorney General, was a violation of state law. As a result, the company is required to pay, as part of a settlement, over $66,000 in penalties and other costs. The company was also tasked with taking steps to improve the way that the respond to customer complaints about pricing. I would suggest, as a start, not lying about a tax that doesn’t exist.  Attorney General Schneiderman said, about the investigation:  There has to be one set of rules for everyone, no matter how rich or how powerful, and that is why our office must ensure that even the largest corporations cannot advertise one price and then charge a higher one to New Yorkers. Whether it’s securing the largest financial settlements in U.S. history to address misconduct that crashed the economy, or settling cases with the nation’s largest retailers, this office will continue to stand on the side of ordinary New Yorkers.  Walmart is one of the world’s largest retailers, operating more than 11,000 stores in 27 countries; 117 of those stores are located in the State of New York. It ranks #20 on Forbes’ Global 2000 for 2014. The company, founded by Samuel Moore Walton and James Lawrence Walton in 1962, pulls in over $400 billion annually.  Author’s Note/Update: Randy Hargrove, a company spokesperson for Walmart, reached out to me after this story was published and asked that I include the following statement:  We are pleased to have reached an agreement with the New York Attorney General’s office that addressed concern about a promotional pricing issue in our New York stores. We strive for accuracy, and we are further enhancing our procedures to help ensure proper promotional pricing. We apologize for any inconvenience to our customers. They can rest assured that Walmart is committed to delivering the products they need at everyday low prices.  Want more taxgirl goodness? Pick your poison: follow me on twitter, hang out on Facebook and Google, play on Pinterest or check out my YouTube channel. For cases and tax related docs, visit Scribd.
The State of New York has tried to tax sugary drinks like Coca-Cola for years but has never been able to push a "sugar tax" through the legislature. That didn't keep retailer Walmart from telling customers that there was such a tax - and pocketing the extra.