Schnucks, Dierbergs to Pay Penalties to Missouri
ST. LOUIS - Missouri Attorney General Jay Nixon announced Friday that Schnucks and Dierbergs, which had been adding a surcharge that appeared to be a sales tax to video rental receipts and had kept some of the money, have now agreed to end the practice and pay $110,000 each in penalties to the state, according to published reports.
Schnucks and Dierbergs, both based here, said they hadn't done anything unethical or unlawful and had consented to change the wording on video rental receipts to prevent consumer confusion. In a statement, Schnucks referred to the matter as "strictly a language issue."
The attorney general's office has been looking into surcharges since last year, when cell-phone companies Nextel and Sprint agreed to stop putting monthly charges on customer bills that seemed to be taxes but weren't.
Undercover investigators at Nixon's office rented videos at Schnucks and Dierbergs locations. Both grocers listed a surcharge of seven cents on the same line where sales tax is usually displayed.
Because both companies paid a use tax to Missouri when they first bought the videos, they didn't have to collect sales tax with each rental, Nixon explained in a statement.
"Customers who saw this extra fee on the receipts likely thought it was a genuine tax, when it was not," he noted. Schnucks and Dierbergs have said they won't add the surcharge on future rentals unless it's required by law, Nixon said.
Cole County Circuit Judge Thomas Brown approved the agreement between the state of Missouri and the grocers.
Schnucks and Dierbergs, both based here, said they hadn't done anything unethical or unlawful and had consented to change the wording on video rental receipts to prevent consumer confusion. In a statement, Schnucks referred to the matter as "strictly a language issue."
The attorney general's office has been looking into surcharges since last year, when cell-phone companies Nextel and Sprint agreed to stop putting monthly charges on customer bills that seemed to be taxes but weren't.
Undercover investigators at Nixon's office rented videos at Schnucks and Dierbergs locations. Both grocers listed a surcharge of seven cents on the same line where sales tax is usually displayed.
Because both companies paid a use tax to Missouri when they first bought the videos, they didn't have to collect sales tax with each rental, Nixon explained in a statement.
"Customers who saw this extra fee on the receipts likely thought it was a genuine tax, when it was not," he noted. Schnucks and Dierbergs have said they won't add the surcharge on future rentals unless it's required by law, Nixon said.
Cole County Circuit Judge Thomas Brown approved the agreement between the state of Missouri and the grocers.