Are ATM fees charged by stores subject to sales tax?

I used my debit card in a restaurant. They explained they only had ATM, wrung up at the register in $20.00 increments and there was a $1.00 fee. I agreed. Later I noticed on the receipt that they charged sales tax on the fee too. (My bank also charged me a fee of a few dollars.) I realize it's only 8 cents but it just seems wrong. We've never gone back.

Answers:
I suspect they LIED in the first place. The ONLY way this story works is if they used your card to withdraw CASH from an ATM and used the cash as payment. That would require your PIN and any fee would be charged by the ATM to your account. They couldn't tax it if they tried.
They cannot charge tax on that item. However, I suspecdt it was inadvertent.
How can a merchant run it on an atm? If it really is an actual atm machine he maybe violating the law or his merchant providers agreement.

Now if it is a point of sale terminal. The merchant charged you a $1.00 fee and your bank charge you a fee for using your debit cards as a pin transaction.

Now if the point of sale device is registering as an atm. You need to tell your bank that was not an atm you used.

Some States do add sales taxes to service charges.

Some atms will also add sales taxes if you are purchasing an item from that machine.

Here is a link that show some photos of a pos device.

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