b'3. General Service Tax on Drycleaning Versus a State Taxa per-ticket basis or as a straight percentage of the customer on Services as Part of a Statewide Cleanup Fund invoice, the fee should closely match owner compliance Cleaners in states where a general state drycleaning tax onexpenses. Additionally, a group of drycleaners that decides drycleaning services exists will need to nd out if theto charge the same fee, regardless of their individual environmental fee should be applied before or after the taxcompliance cost, will likely be violating federal and state when calculating the fee or fee percentage to pass on tounfair trade practice laws.consumers. Additionally, some states have a tax that is applied to all drycleaning services as part of their stateWhat Does The Law Say About Environmental Surcharges cleanup fund Again, a drycleaner will need to nd out howOr Fees?this fee is to be applied in the transaction. 4. What Items Can You Apply the Environmental Fee to?The law typically used or cited with regard to the way Adrycleaner may or may not be able to apply anenvironmental surcharges/fees is communicated or whether environmental fee on all drycleaning services. Somethey are deceptive and unfair is The Federal Trade Commission services that do not have an associated hazardous wasteAct (FTCA). This act broadly protects both businesses and cost, like shirt laundry or alterations may have to beconsumers from deceptive and unfair practices. Just think of invoiced without tying that service to an environmental fee.truth in advertising, which these types of laws are generally In states that have a drycleaning cleanup fund, the tax infocused upon.generally charges on all services, including shirt laundry and alterations. In this case, it may be acceptable to includeOnly the Federal Trade Commission (FTC) can enforce this act. a fee on all services since all of the services are being taxedAs a result, many states have either copied or strengthened their under the fund. In either case, it would be wise for anyown laws, which provide similar protection to businesses and business to get specic information from their state. consumers, as well as providing for heavy penalties. Regarding the use of environmental surcharges and fees, federal and state 5. You Must Disclose the Environmental Fee laws have rarely been tested, except where there are obvious The price quoted to the customer for any service in whichinfractions, such as advertising one price but charging another. the environmental fee/surcharge is added must include theThese laws do not specically prohibit surcharges or fees, nor cost of the environmental fee/surcharge in the total amountdo they provide businesses with any clear language on their use. quoted, whether verbal, written, posted, or advertised. ForIt is still rare for the FTC or the States Attorney Generals instance, a cleaner may not post the price of a two-pieceOfce to go after companies the improperly add an suit at $8 if the true end price of that suit is actually $8.25,environmental surcharge/fee to their invoice, but it does which would include the environmental fee. happen.In this case, the verbal, written, posted, or advertised price for that suit is in fact $8.25-that is, $8 for the service and a clearly stated message that there is a $.25 or (3.125%) environmental surcharge as well. It should be noted that under most state laws, it is illegal for a merchant to conceal or omit key information in any sales or advertising transaction. Disclosure is the key here!6. Accounting and AccountabilityIf an environmental surcharge or fee is collected, then it is prudent for that owner to account for this collection activity on their business books, since it is most likely considered taxable income. Additionally, it is equally prudent for owners to account for those environmental fees that they are currently paying. It is not prudent to charge a fee that exceeds the actual cost of owner compliance.7. How Much to ChargeRegardless of whether an environmental fee is collected onContinued on next pageMidwest Drycleaning & Laundry Institutewww.MWDLI.org / 765-969-5745 \x009'