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The “Black Tax”

March 29, 2015

Students, faculty, and alumni of Historically Black Colleges and Universities (HBCU) gather annually in Charlotte, North Carolina for a crowd- drawing basketball tournament in early March. The tournament features 11 colleges and brings tens of thousands of people to the “Queen City”, grossing over $30 million in recent years. The Central Intercollegiate Athletic Association (CIAA) weekend has become an anticipated weekend for local businesses. Hotels of course get their share of travelers looking to stay and dine.

Unfortunately, no one visiting a Charlotte Ritz- Carlton anticipated paying an additional 15 percent on top of every purchase they made, no matter how big the tab or the size of the party. During the weekend, a photograph of a receipt surfaced showing the purchase of 4 alcoholic beverages, some sweet potato fries, and this unexplained yet expressly stated CIAA service charge totaling $10.20. To add to the issue and insult, the hotel placed small table tents stating that there would be a $125 hourly minimum to occupy a lounge table and the fee could only be waived if the amount was consumed in drinks and food.

Since the tournament, controversy around the hotel, and this temporary service charge, has caused many to believe that this was a “black tax:” a fee posed to African-American customers during a large event attracting mostly African-Americans. The hotel released a statement to the local news station providing, “Due to the size of CIAA event, we instituted a modest 15% service charge for our lobby beverage servers, on whom the event places significant demands throughout the weekend.” Consequently, this wasn’t enough to stop the questions many still had.

Customers and now the Department of Consumer Affairs want to know just how the hotel made this decision and how common this practice is. Specifically, was this type of fee imposed during Speed Street, an annual, NASCAR-related downtown festival whose patrons tend to be mainly white? Its an event that generates great traffic as Charlotte housed the NASCAR Hall of Fame in 2010.

Early last week the Attorney General sent a 2-page inquiry to the Ritz-Carlton that asked for clarification and a response to seven specific questions within ten days. These questions were as follows:

1) When did management decide to impose the surcharge?
2) What was the purpose of the surcharge?
3) At what dates and times during CIAA Tournament was the surcharge imposed?
4) Did the hotel impose the surcharge uniformly on all patrons during the time period it was imposed?
5) How and when did the hotel disclose to the consumers that their bills would include the surcharge?
6) From an accounting standpoint, what did the hotel do with the money collected via the surcharge?
7) Has this hotel imposed similar surcharges for other events? If so, please list the events, the dates of the events, and the amount of the surcharges imposed at those events.

The Attorney General and many local and national media outlets are currently awaiting a response. The hotels response would help clarify the intent behind the surcharge and other fees imposed at their facility. However, such clarification could reveal unfair business practices and trigger further action by the Department of Consumer Affairs.