July 26, 2024

The Nerve Archive

Where Government Gets Exposed

Reader: Are Officials Expanding Definitions under Hospitality Tax?

taxes on receipts

AN EXTRA TAX ON ARTISAN BREAD?

Occasionally – just occasionally – we’re asked questions about state or local taxes that we’re unable to answer. That’s because South Carolina’s tax code is a byzantine mess, with exemptions and “user fees” special taxes applying to some products but certain characteristics but not others, etc., etc. The state’s hospitlity tax is particularly confusing. No one seems to know why it’s levied on some products but not others, or what the revenue from it actually funds.

Consider the following email, sent to us last week – along with the image above – by Joe Hodapp of Charleston.

I thought I would let you know about Charleston County tax enhancement that showed up several months ago. We shop at Costco, and I noticed that Costco breaks down the taxes charged and letters the items with a matching rate. Charleston County, like some other counties in South Carolina, imposes a “hospitality tax” of 2 percent, which goes into the state’s General Fund. What’s interesting is that this “hospitality tax” shows up on a specific artisan bread we purchase at Costco; the bread is made locally, with all natural ingredients and no preservatives. I can buy an organic loaf of packaged bread and get charged 1.5 percent, but when I buy this other bread I get charged 1.5 percent plus 2 percent.

I asked the manager at Costco about it. He couldn’t give me an answer. I checked with my County Council member and she couldn’t give me an answer.

There’s been no new tax imposed, no tax increase imposed. Yet revenue has been enhanced by imposing a 2 percent “hospitality tax” on a basic food item – bread. I’m wondering how many other items fall into this category? How many retailers are not properly showing this additional tax on their customers’ receipt? Who’s making the decision to add items that fall under this taxable heading?

Some restaurants are now breaking out taxes paid by showing a “liquor tax” imposed aside from the sales tax. I applaud retailers who show this kind of breakout so that we at least know how much we’re paying in taxes on an itemized basis.

I hope more consumers will ask about these add-on taxes. I’m sure that the amount paid is too small to make an inquiry and some taxing bureaucrat knows it. The thing is – those nickels, dimes and quarters all add up to millions of dollars, over time.

If you have a story about governmental abuse or incompetence – or if you can supply the answer to Mr. Hodapp’s mystery – email us at news@thenerve.org.

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The Nerve