Gas stations offering credit, cash discounts could lose customers
Q. I have recently noticed that with the price of fuel going up and the margins of profit on fuel tightening, gas stations have started to advertise fuel prices with a "cash" sign next to them. I thought it was illegal in Massachusetts to charge two different prices for a good or service? Why does it seem more and more stations are getting away with this? Has the law changed recently?
Tony Petrone, Tewksbury
A. Massachusetts law hasn't changed.
While gas stations haven't been offering different cash and credit prices for years, it isn't because they couldn't. Massachusetts firms, not just gas stations, can charge different cash and credit prices as long as the credit card price does not include a surcharge.
The business must conspicuously note the price difference and call the cash price a discount.
Credit card fees are the bane of gas stations, considering the low profit margin of gas sales, explained Jeff Lenard, vice president of the National Association of Convenience Stores.
With gas prices rising, more consumers are using credit cards, he said. In the past two years, Lenard said fees paid by the gas stations to credit card processors have doubled. Typical cash discounts run from 2 to 5 cents a gallon.
But Lenard said stations engaging in the practice run the risk of alienating customers who don't want to pay a different price for the same gas.
Q. Can you explain what is taxed as take-out food? I have several great food shops in my neighborhood, but sometimes I get a tax on a ready-made good and sometimes not.
Anonymous
A. You have waded into muddy waters. Massachusetts sales tax law is clunky.
Take bakeries. If a bakery also sells sandwiches or taxable drinks such as coffee, under the law it typically would be considered a restaurant and therefore should charge sales tax.
However, the bakery could actually portion itself into a restaurant section and bakery section.
In that case, goods sold in the bakery section would be tax-exempt - if purchased in groups of six or more for consumption elsewhere.
The general rule for take-out is if food is sold ready to eat - such as a pizza - it is subject to sales tax.
However, if the food is sold frozen and must be prepared at home for consumption, the reverse is true - no sales tax.
Bob Bliss, spokesman for the state Department of Revenue, said most businesses understand these finer points. It's just hard for consumers to keep track of.
