NORFOLK – 13News uncovers more stores charging state tax on tax-exempt items.

"The state's making money that they're not supposed to be making," said shopper Pat Lowery.

"I never looked at anything from a tax perspective because you just trust they're doing what they supposed to be doing," noted shopper Carol Miller.

Governor Kaine wants a full accounting.

"We won't tolerate it. If we catch them, they'll realize they've committed a very serious offense," he said.

13News Investigators uncovered retailers like Target, Kroger and Food Lion charging tax on a list of items like medicated mouthwash and powder, eye drops and acne products -- items the state made tax-free back in 1998.   

Joel Davison with the Va. Dept. of Taxation admits, "We leave it to the retailers to in large part police themselves." 

Should the state trust retailers to get it right when we found so many stores getting it wrong?  13News found some pharmacies weren’t sure which over-the-counter medicines should be tax free.  

A Rite-Aid in Norfolk’s Ghent charged sales tax on Crest Medicated Mouthwash, Gold Bond Medicated Powder and Noxzema Medicated Shave Cream -- all tax free products.

Rite Aid officials told 13News Investigators, “…we make every effort to code items properly.”  The company did admit its stores were charging tax on some over-the-counter medicines and said, “…we’ve corrected an error in our system so these items are correctly taxed in the future.”

Video: Sales tax investigation sparks state review

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During a spot check of a nearby Walgreens, we were charged tax on Noxzema Medicated Shave Cream.  Company executives eventually told us we should not have been taxed and added, “Our system has been updated today and this change will be reflected at all stores.”

At a 7-11 in the Great Neck section of Virginia Beach, we were charged sales tax on Listerine Medicated Mouthwash, which is a tax-exempt medicine. 7-11 executives told us they had “a lot of people involved” investigating the matter.

The Texas-based convenience store chain boasts nearly 600 stores in Virginia. Spokeswoman Margaret Chambri says the retailer has not changed its coding system so that Listerine and all other antiseptic mouthwashes are tax-free in the state.

"This action was taken by our corporate offices in Dallas," she explained. "The mistake was ours."

According to Chambri, company executives are reviewing other products to ensure they're being accurately taxed.

We found one of the area’s largest grocery stores getting it wrong. At Farm Fresh in Great Neck in Virginia Beach, we paid sales tax on medicated shave cream as well as two brands of medicated mouthwash.

Ron Dennis with Farm Fresh said, “Mistakes were made and our pricing department has assured me a complete review of all non-taxable items has been performed, and corrections have been made. The mistake was not intentional.  Our integrity in how we treat our customers is not negotiable.  If a customer feels like he has been charged inappropriately taxed, has a receipt, we will refund the tax and purchase price of the product.”

A number of stores told us they strive for accuracy.

Dollar Tree told us they check products on a daily basis. Yet, we found the discount chain wrongly charging sales tax on its medicated mouthwash. Only after 13News Investigators stepped in did the company tell us they found, “…a coding programming error.”

More than two weeks after Target executives thanked us for calling their attention to similar problems at their Hilltop store, 13News Investigators still paid tax on a number of items the state says should be tax free.

Governor Kaine is promising to get to the bottom of why people are being charged sales when they shouldn’t be.

“Any notion that retailers are ripping people off by charging them sales tax on basic necessities like food or medicine is outrageous. And if we have a chance to catch folks, they will know we take this very, very seriously.”

For all of the mistakes we found as we investigated this issue, each time we purchased a taxable item, we were in fact charged sales tax.