Recent customers at Streetsboro’s Popeyes Louisiana Kitchen may be due some pocket change.
A computer glitch resulted in the franchise improperly charging customers sales tax from Aug. 14 or 15 through Aug. 27. According to Ohio law, restaurants may charge sales tax for food eaten in the establishment, but may not charge that tax for carry-out orders or food purchased through the drive-through. The only exception is soda, which may be taxed regardless.
Portage County Treasurer John Kennedy brought the matter to The Portager’s attention after he was alerted by Streetsboro Mayor Glenn Broska. The Portager contacted Sidhu Realty Capital, which owns the franchise in Streetsboro, and spoke with Chief Operating and Financial Officer Dan Radocaj on Aug. 26.
Radocaj said he left his Cleveland-area office immediately, ordered food through the Streetsboro drive-through and realized the taxes were indeed being improperly assessed. Back at his office, he corrected the problem the same day.
Local confirmation was provided by Broska himself, who visited the drive-through the evening of Aug. 26 and texted Kennedy a copy of his receipt. The sales taxes were properly assessed.
Radocaj also devised a plan to refund customers. Sidhu Realty Capital is matching sales records to credit cards and is refunding those that can be identified, he said. There will also be a sign posted at the drive-through window inviting customers who believe they may have been affected to ask for a refund.
Since most customers do not keep drive-through receipts, Radocaj said requests and refunds will be entirely based on the honor system. The average refund per customer, he estimated, will be about 90 cents.
“It is not our intention for these things to happen,” he said. “As soon as we were made aware of it, we fixed it immediately, and we are doing our best to make sure that those impacted are directly benefiting back from the error, and then also trying to go above and beyond to make sure those individuals that we can’t identify, to give them the chance to come forward, as well.”
Customers have a short amount of time to request those refunds. The “window” will be open for about the same amount of time the taxes were being improperly collected, about two weeks, Radocaj said.
He estimated that about $1,400 had been improperly collected.
Radocaj could not say precisely why the improper collections began, but theorized it may have been related to a company software update that occurred at about the same time. Those updates take place every time a menu item is added, menu prices shift, a locale’s sales tax changes, a location is added or any number of other changes are made, he said.
To ensure that improper collections will not happen again, Radocaj said company officials will test the entire system each time system updates are made. He stated that improper collections did not occur at Sidhu Realty Capital’s other stores, which include six Dave’s Cosmic Subs that are not located in Portage County, because they use different software systems.
Broska isn’t taking chances.
“We will continue to monitor,” he said.
Portage County Prosecutor Victor Vigluicci said complaints must be filed with the Ohio Department of Taxation, which is in charge of assessing and collecting Ohio’s sales tax.
“If, after investigation, they found a violation, they would refer the matter to either my office or the Attorney General for enforcement,” Vigluicci stated in an email to The Portager.
Radocaj said he alerted the Ohio Department of Taxation himself and said they approved his repayment plan. Citing privacy concerns, the Ohio Department of Taxation could not confirm Radocaj’s statement.
Paul Sidhu, CEO of Sidhu Realty Capital, gained a franchise for Popeyes Louisiana Kitchen in 2021 and opened the Streetsboro location in early July. Since then, it has proven to be such a popular eatery that residents have complained about lines snaking out onto Route 14 and eastbound motorists creating hazardous traffic situations as they try to enter the parking lot and drive-through.
Wendy DiAlesandro is a former Record Publishing Co. reporter and contributing writer for The Portager.