Is Adding the ‘COVID-19 Surcharge’ Legal in Florida?
As businesses across Florida are reopening following the coronavirus pandemic, some of them are adding the so-called “COVID-19 surcharges” to their bills. If you are a business owner who is considering adding the surcharge to your customer bills, you may be worried about the legitimacy of such surcharges.
Is it legal to add the “COVID-19 surcharge” to your bills after reopening amid the coronavirus pandemic?
Why Are Businesses Adding the ‘COVID-19 Surcharge’?
First of all, it is important to understand why businesses are adding those surcharges to their bills:
- Many companies are trying to counterbalance the cost of closing or limiting business operations for months during the stay-at-home orders;
- Others, meanwhile, are using surcharges to deal with increased operational costs caused by COVID-19.
The surcharge can range from a few dollars to a specific percentage of the total bill. While some customers may not like the idea of having to pay more, others understand that businesses need a few extra bucks to keep them afloat in the wake of the coronavirus pandemic.
Are COVID-19 Surcharges Legal?
After Florida entered Phase One of the governor’s reopening plan, some businesses remain closed, while others are allowed to open but must follow specific requirements imposed by the state government (e.g., restaurants can operate at 50% capacity).
As customers are slowly returning, businesses may consider adding the COVID-19 surcharge to cover:
- Their financial losses associated with the pandemic;
- The purchase of personal protective equipment (PPE) for workers; and
- The purchase of cleaning and disinfecting supplies to maintain their premises in a safe condition.
But are those surcharges legal? While many customers may not be thrilled about the idea of paying the COVID-19 surcharge, the practice of adding surcharges is completely legitimate in Florida.
However, it is vital for businesses to be transparent when adding those surcharges. Adding a surcharge without notifying the customer would be unethical and may not be good business practice.
One of the ways to notify customers of the extra charge would be to put out signs or post an alert on your company’s website.
Are COVID-19 Surcharges Tax-Exempt?
In most states, sales law statutes define “sales price” as the total bill paid for a product or service that includes all costs. In other words, a business cannot break out elements of cost (e.g., the COVID-19 surcharge) on the customer bill and expect it to be tax-exempt.
Thus, if the underlying item (the product or service sold) is exempt from tax, then the COVID-19 surcharge is most likely exempt, too. However, if any special taxes apply, the question of tax exemption becomes more complicated.
Can You Use Waivers of Liability?
Businesses are facing an increased risk of litigation after reopening amid the COVID-19 pandemic. In light of this, many companies are requiring their customers and visitors to sign waivers of liability. But can those waivers protect your business from litigation risks, and are they even enforceable?
Talk to our West Palm Beach business litigation attorneys at Pike & Lustig, LLP, to determine whether adding the COVID-19 surcharge or using a waiver of liability would be legal in your particular situation. Call at 561-291-8298 to discuss your case.