Wegmans will receive $227K tax refund, court rules

Supermarket chain Wegmans will not have to pay more than $227,000 in sales taxes after the state Supreme Court's appellate division reversed a prior decision.

Rochester-based Wegmans has been battling the state over whether information the grocery retailer bought from RetailData LLC between June 2007 and February 2010 is taxable.

Wegman's is based in Rochester and operates about 50 locations throughout New York.

Since 1995, Wegmans has purchased competitive price audits and reports from RetailData LLC to figure out how much the supermarket chain's competitors charge for certain items. The Department of Taxation and Finance audited Wegmans' tax liability for a time period from June 2007 to February 2010 and determined that the information provided by RetailData qualified was taxable and that Wegmans owed more than $227,000 in sales taxes.

The grocery chain filed an appeal challenging the finding and asking for a refund. In 2015, a judge concluded that the supermarket chain did not qualify for a refund because the information Wegmans bought from RetailData was not personal and individual in nature. In order to qualify for a tax exemption, the information would need to be personal and individual in nature.

A three-member tribunal upheld the judge's decision last year. "There is nothing 'uniquely personal' about the price of an item in a supermarket," the tribunal said. "Furthermore, such information is obviously not confidential, as it is accessible to anyone who enters a store. These facts thus indicate that the information provided by petitioner to its clients is non-personal and non individual in nature and therefore taxable."

Wegmans appealed and on Wednesday the state supreme court's appellate division concluded that the information RetailData provided to Wegmans was considered personal or individual in nature and annulled the previous decision.

"We agree with petitioner that, under the circumstances presented here, such information does not derive from a singular, widely accessible common source or database as that test has previously been applied and commonly understood in determining the applicability of the subject tax exclusion," the court said.

Efforts to reach a lawyer for Wegmans were unsuccessful.

miszler@timesunion.com • 518-454-5018 • @madisoniszler