Students taxed twice
Two days before the spring 2012 semester ended, Jeff Solomon, now a University of Idaho sophomore, contacted campus dining because he noticed a flaw in the flex dollar system on his campus meal plan.
Solomon paid six percent Idaho sales tax on his meal plan when he purchased it at the beginning of the semester. Throughout the year, he paid additional sales tax on every purchase he made with his meal plan flex dollars.
“Basically, on the meal plan you get so much flex money that you can spend … I noticed at the beginning of the semester I had been buying stuff and was still paying tax,” Solomon said. “I went and talked to them about it and they said that when you swipe your card, it deducts your tax because you’ve already paid it when you paid for the meal plan. I noticed when I did swipe my card it wasn’t deducting the tax like it was supposed to. So basically I’ve been paying double tax on all my flex dollars.”
Solomon received a refund for the spring semester but his complaint drew attention to the larger issue — all students who paid tax on their meal plans were still charged an additional tax.
“The issue was that we had a miscoding in the database that runs the flex system and that miscoding was the process which credits back sales tax charged at the point of sale onto the flex account,” said Tyrone Brooks, assistant vice president for Auxiliary Services.
Brooks said the point of sale does not have the ability to differentiate between payment methods, so students are supposed to be charged tax on all flex purchases and that tax is later reimbursed on their flex account.
“It charges tax on everything, as the state of Idaho is one of the few states that requires sales tax charged on food items,” Brooks said. “They get charged the second tax and then we run a routine through the Vandal Card Office that reverses the amount of sales tax paid. That was the mechanism that, when we set up last year, didn’t get set appropriately.”
Ron Smith, vice president for Finance and Administration, said once he found out about the issue he began making phone calls to get the issue resolved.
“We made sure we got the IT people so that they could run the queries through the Vandal Card office, so we could find out what the effect was and the students that were affected and how long it had happened.
And then auxiliary leadership got together and said ‘what’s the best way to provide the value that those students paid for back to them,’” Smith said.
Brooks said the department that manages the tax refund process has verified the computer code has been set up correctly for the next fiscal year.
“I’m told they are running reports regularly so that nothing slips through the cracks,” Brooks said.
Brooks and Smith said all students who used flex dollars during the 2011-2012 academic year will receive a refund within the next couple weeks.
“We will provide a refund to anyone who currently has an active account with the University of Idaho that we can put flex dollars back on,” Brooks said. “Students who are on other campuses, or who have graduated or left the university … we will credit it back to their student account. If their account has a zero balance it will trigger the normal refund process through the cashier’s office.”
Smith said students who may have graduated in the spring or who no longer have a student account will still receive a refund.
“We didn’t know there was a problem, a student identified that for us…as soon as we got some inkling that there was something wrong, we followed it up and now we’re making it right,” Smith said.
Brooks said he thinks the process to remedy the issue took place quickly, and students may have started receiving refunds already. The official refund process is projected to take place by Sept. 7.
“It’s unfortunate that it happened,” Brooks said. “We did review it once we heard about it potentially being a bigger issue, and from the data extracts that were performed…we were able to quickly identify exactly the scope of the problem and start to look at how to correct it. I think we’ve come up with an ability to correct it very quickly.”
Kaitlyn Krasselt can be reached at firstname.lastname@example.org