Hertz - overcharged on sales tax -- what gives?

I'm looking at a receipt from a recent rental in Allston MA (near Boston). Copying:

RENTAL CHARGES
DAYS 3 @ 35.00 105.00
SUBTOTAL 105.00
ENERGY SURCHARGE 1.03
LICENSE & TAX REIMBURSEMENT 6.20
MOTOR VEHICLE LEASE TAX 0.60
TAX 6.25% 17.01
AMOUNT DUE 129.84

6.25% is indeed our sales tax here. But 6.25% of $105 is not $17.01. Even if the additional charges ($1.03, $6.20, $0.60) were taxable, 6.25% of $112.83 is not $17.01.

What's going on here? By all indications Hertz is more than double-charging sales tax.

I wrote to the branch manager (have a contact email from a prior reservation) and have so far received no reply. Very puzzled by this.

I'm looking at a receipt from a recent rental in Allston MA (near Boston). Copying:



6.25% is indeed our sales tax here. But 6.25% of $105 is not $17.01. Even if the additional charges ($1.03, $6.20, $0.60) were taxable, 6.25% of $112.83 is not $17.01.

What's going on here? By all indications Hertz is more than double-charging sales tax.

I wrote to the branch manager (have a contact email from a prior reservation) and have so far received no reply. Very puzzled by this.

If you rented in Boston proper you also pay a flat fee (for the convention center) as part of the tax. I believe it is $10.

See, e.g.,
http://www.mass.gov/dor/businesses/help-and-resources/legal-library/letter-rulings/letter-rulings-by-years/1995-1999-rulings/letter-ruling-99-6-convention-center.html
http://www.mass.gov/dor/businesses/current-tax-info/guide-to-employer-tax-obligations/trustee-and-excise-taxes-requiring-registration/convention-center-financing-surcharges.html

Thanks Jerry. Good point. I'm familiar with that fee but it was not shown on my receipt so I gathered it didn't apply to this rental. Incidentally that fee is a charge Hertz elects to impose, not an actual "tax" so it cannot lawfully be called a "tax" on a customer receipt.

Thanks Jerry. Good point. I'm familiar with that fee but it was not shown on my receipt so I gathered it didn't apply to this rental. Incidentally that fee is a charge Hertz elects to impose, not an actual "tax" so it cannot lawfully be called a "tax" on a customer receipt.

???
Hertz has to collect the surcharge as a tax under state law. They cannot withhold it.
The Boston Vehicular Rental Transaction Surcharge of $10 is imposed upon each vehicular rental transaction contract in the city of Boston. All operators of vehicle rental establishments must collect the $10 surcharge on rental contracts signed or executed in the city of Boston for passenger cars, trucks, vans, and/or trailers.

And also from DOR:
The legislature recently granted authority to the Commissioner to administer the CCF surcharges as though they were taxes and makes them subject to all the tax administration provisions of chapter 62C. St. 1999, c. 68, § 13; G.L. c. 62C, § 86.

Great find, Jerry. But see http://www.mass.gov/dor/businesses/help-and-resources/legal-library/tirs/tirs-by-years/2003-releases/tir-03-24-convention-center-financing-surcharges.html (emphasis added):

The $10 CCF surcharge on a vehicle rental contract in Boston is not part of the sales price subject to Massachusetts sales tax. For billing purposes, the $10 CCF surcharge must be stated separately from the sales price and the sales tax. See Letter Ruling 99-6.

If the reason for the inflated "tax" line is this $10 CCF surcharge, Hertz is still not within its rights to combine the CCF surcharge with sales tax.

Letter ruling 99-6, for anyone interested, is here (http://www.mass.gov/dor/businesses/help-and-resources/legal-library/letter-rulings/letter-rulings-by-years/1995-1999-rulings/letter-ruling-99-6-convention-center.html).

Complain first, then get facts. It's the FT way.

dispute the sales tax charge with your credit card. $17.01 is 6.25% of about $275. let hertz try to explain to your credit card company why they broke the law by lumping the surcharge with the sales tax.

dispute the sales tax charge with your credit card. $17.01 is 6.25% of about $275. let hertz try to explain to your credit card company why they broke the law by lumping the surcharge with the sales tax.

Or you could just call hertz and ask.

Since you already are fairly sure what the fee is for, why bother the credit card company? So they can put through paperwork to be told to tell you it's the fee plus the tax?

It's blatantly obvious (well at least to me) their line for tax includes the 6.25% on the amount plus the $10 surcharge. It's silly to involve the bank when the charge is legitimate because you don't like the way the receipt is written.

It's not a question of "not liking the way the receipt is written." The receipt violates Massachusetts law. It's as simple as that.

But I did write to Hertz, yesterday. No reply yet. We'll see if they can figure it out. I wouldn't be surprised if they can't or if it takes them a long time. And incidentally that's exactly why the law prohibits the combination of these charges in a single line item -- such combinations make it too hard to figure out what's being charged and why.

duplicate of post below

Actually it violates a letter written by the department of revenue, not a law voted on by the senate and house in Massachusetts.

A letter written for a totally different question, was the fee taxable or not.

Exactly what is a letter ruling in Massachusetts?

What is a Letter Ruling?

A Letter Ruling (LR) is an advisory ruling issued by the Commissioner of Revenue in response to letters from individual taxpayers on specific issues relating to the interpretation or application of the Massachusetts tax laws. An LR is issued to an individual taxpayer with respect to a particular set of facts and represents the position of the Department on those facts only. It may not be relied upon by other taxpayers.


That's a bit different than a law

The document I cited is a Technical Information Release, not a Letter Ruling. From the What are TIRs? (http://www.mass.gov/dor/businesses/help-and-resources/legal-library/tirs/) page (emphasis added):
Technical Information Releases (TIRs) inform taxpayers and tax practitioners of DOR's response to changes in federal or state tax laws or to court decisions interpreting those laws. A TIR states the official position of the Department of Revenue, has the status of precedent in the disposition of cases unless revoked or modified, and may be relied upon by taxpayers in situations where the facts, circumstances and issues presented are substantially similar to those in the TIR. ...

Not a law, but it has the weight of precedent. Good enough for me! Hertz is obliged to comply.

The document I cited is a Technical Information Release, not a Letter Ruling. From the What are TIRs? (http://www.mass.gov/dor/businesses/help-and-resources/legal-library/tirs/) page (emphasis added):

Not a law, but it has the weight of precedent. Good enough for me! Hertz is obliged to comply.

So? It may subject Hertz to some penalty or wrist slap with the state but I don't see where it benefits you (you certainly won't be entitled to a refund as Hertz is required to collect the surcharge as a tax.

Yeah, you'll certainly show them.

It's still a legitimate charge.

It's still not a law though.

Or you could just call hertz and ask.

Since you already are fairly sure what the fee is for, why bother the credit card company? So they can put through paperwork to be told to tell you it's the fee plus the tax?

It's blatantly obvious (well at least to me) their line for tax includes the 6.25% on the amount plus the $10 surcharge. It's silly to involve the bank when the charge is legitimate because you don't like the way the receipt is written.why waste your own time? the bank has vastly more power than you do. hertz will tell its customers to pound sand, even when they are obviously wrong. much harder to ignore the bank.

The bank has no power to overturn a legitimate fee. It's a waste of the banks time for you to put in dispute something you owe (and know exactly what it's for) because you don't like the way it's written on the invoice

You will contact the bank
They will contact hertz
Hertz will tell the bank it's the sales tax and the $10 tax
The bank will tell you that

You will get your jollies by having your servants at the bank jump through all kinds of hoops to tell you exactly what you already know.

It's a waste of everybody's time.

Hertz is not wrong. The tax is owed, and it was paid.

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