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Date:         May 14, 2001
Contact:   Adam Radinsky, Deputy City Attorney
                  Consumer Protection Unit, 458-8336


There have been reports of many Southland businesses-including restaurants, hotels, and convenience stores-adding a so-called "energy tax" or "utility tax" to customers' bills when they pay. This practice is against the law for two reasons. First, calling the charge a "tax" is false and misleading since it makes it sound as if the business is merely passing on a required governmental levy (like the sales tax), when in fact the business is simply raising its prices. Second, whether they call it a "tax" or a "surcharge" or anything else, it is illegal for a business to add any charge to a customer's purchase that was not disclosed beforehand.

Businesses who wish to raise prices to compensate for increased energy costs must do so openly, either by raising their advertised prices, or by disclosing the separate fee in advance to their customers. Consumers in Santa Monica are urged to contact the City Attorney's Office (310-458-8336) if they encounter local businesses using the energy tax scam, and to save all receipts.

To file a complaint online, go to santa-monica.org, then click on "Quick Index" and select "Consumer Affairs." 




This page was last updated on 02/28/11.