Attorney General James Delivers $150,000 to City of Yonkers School District to Support Homeless Youth

Agreement Resolves Microsoft’s Overcharging of Sales Tax to Customers Purchasing Xbox Products Online in New York  

 New York Attorney General Letitia James today delivered $150,000 to the City of Yonkers Public Schools district to promote remote learning by homeless students. The funds will provide assistive technology to students, including iPads, laptops, Wi-Fi connectivity, and more. The payment was provided by Microsoft Corporation, as part of an agreement with the Office of the Attorney General (OAG) to resolve the company’s overcharging of sales tax for products being sold on the Xbox website. Prior to a recent fix implemented by Microsoft, some consumers in New York who purchased an Xbox product online — via Microsoft’s website — were charged an incorrect, higher amount of sales tax.

“We are delivering $150,000 to support homeless youth in Yonkers and provide them with the necessary tools to secure the technology they need to continue to remote learn during these unprecedented times,” said Attorney General James. “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. 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.”

When consumers purchase a product online, they are asked to enter their zip code as part of the billing address in an effort to determine the amount of sales tax they should be charged in connection with the purchase. Some postal codes within a certain zip code may have different tax rates.

On Microsoft’s website, specifically, consumers are asked to input their entire zip code in addition to their four-digit postal code. However, if a consumer enters their zip code without the four-digit postal code, Microsoft nonetheless processes the transaction. Prior to the recent fix made by Microsoft, if a consumer entered their zip code without the four-digit postal code, Microsoft would charge the highest sales tax within that zip code, leading to an overcharge.

One locality where sales tax overcharges occurred was Bronxville, New York, which shares a zip code with a small portion of Yonkers, New York — where residents pay a higher sales tax rate. 

The total amount of sales tax overcharged by Microsoft to Bronxville consumers was approximately $150,000.

As a result of this agreement, Microsoft has implemented a new procedure for processing orders that addresses this particular issue and charges consumers the correct amount of sales tax.

“The COVID-19 pandemic has forced our schools to do even more with less, and I applaud all our teachers, faculty, and staff,” said State Senate Majority Leader Andrea Stewart-Cousins. “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. 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. As state budget negotiations continue, the Senate Majority is focused on significantly increasing school funding and ensuring a three-year phase-in of full foundation aid, along with free broadband access to every student and school.”

“I would like to thank New York Attorney General Letitia James for her swift action with Microsoft,” said Westchester County Executive George Latimer. “The $150,000 in funds, which has been transferred directly to the City of Yonkers School District, will serve a great need with our remote learners who are struggling. The pandemic has caused a great deal of hardship for our youth in many communities, and we know that Yonkers will greatly benefit from this grant.”