Half of one percent is a very small amount, to state the extremely obvious. It can make a big difference in an annual budget, though, for a city that raises sales tax rates by half a percent. That’s fine, as long as merchants don’t do anything silly like charge higher city tax rates outside of the city limits. Like, for example, the car rental counters at the airport in Sacramento, California.
The airport is technically outside of the city limits, where sales tax is 8%. For some reason, though, they charged customers the 8.5% city of Sacramento rate instead. That’s really just pennies per customer, but the companies may have overcharged every customer for two months. That adds up. The real problem is this: who gets to keep the money?
Apparently, no one noticed the discrepancy until an annoyed customer contacted consumer justice crusader Kurtis Ming at Sacramento’s Channel 13. That customer, who sounds a lot like most of our readers, argued with Avis employees over the extra 29 cents on his car-rental bill because he knew that the airport is outside of the city, and the higher tax rate was wrong. The Avis employees disagreed with him, but ultimately came around after CBS called.
The car-rental places, Avis/Budget and Hertz, say that they got the tax-calculation data from the state Board of Equalization, or what other governments would call the “tax department.” The BOE tells CBS 13 that neither the rental place nor the city get to keep the extra money. If it isn’t refunded to customers, the state gets to keep it.
Both companies told Kurtis that the overcharges were a mistake, and they would send customers refunds. The airport businesses aren’t the first to be caught charging too much sales tax, but the others are now back to the correct county, not city rate.