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Blockbusted 

If you think Blockbuster Video's late fees are high, wait until you see how much some stores are taxing you.

Video-rental giant Blockbuster Inc. illegally charges customers city sales taxes at two of its six stores in unincorporated Pima County, while another skipped a new state tax for education.

Blockbuster's store in the River Center, 5555 E. River Road, is the worst and most consistent violator. Opened next to the supermarket now called Garrett's IGA eight months ago, this Blockbuster assesses customers 7.6 percent in sales tax.

The store is at least a half mile outside Tucson's north-central limit, which stops at the Rillito River at Craycroft Road. Unlike other Blockbusters, the River Center store does not have the excuse that it is in confusing and changing territories sought by the incursions of Tucson, Marana, Oro Valley or the preservation effort of start-stop Tortolita.

Indeed, a Blockbuster Video in unincorporated Pima County at North Thornydale and Linda Vista roads also was charging customers a 2-percent municipal sales tax in 1999 and sending the money to Marana. Lou Benson, the onetime marshal of the onetime town of Tortolita, busted that Blockbuster, a pizza joint and Marana for that improper levy.

At 7.6 percent, the sales tax collected at Blockbuster at River Center matches that of stores inside Tucson and presumably includes 5.6 percent in state sales tax and 2 percent in city sales tax. The state rate increased June 1 by .6 percent, the amount Arizona voters approved in the November election for increased education spending. There is no county sales tax.

Despite the recent increase and occasional annexation battles, sales tax does not appear to be too great a mystery. Other stores at River Center, including Walgreens and IGA, charge the correct, 5.6 percent, amount in sales tax.

But rent a new release for $3.99 at Blockbuster at River Center and the tax is 30 cents. That's almost 8 cents too much. Rent a "Favorite" for $2.49 and the total bill will be $2.68 when it should be $2.63.

The overcharges by Blockbuster, now trying to settle several class-action lawsuits that contend its late fees are exorbitant, are scarcely a cause for concern. None of the 10 customers who paused Saturday as they left with their fresh rentals noticed the sales tax mistake, not even one renter who had a $35 bill.

When the mistake was pointed out, most were unmoved. Only one, Heidi Storm, who several years ago was not shy about protesting wrongs at the University of Arizona, would speak on the record, saying: "It bugs me. It's not right. Just because I'm a little blasé doesn't mean that I don't think it's horrible."

What's up?

Blockbuster doesn't know. A pleasant young woman named Sam answered the River Center Blockbuster phone Monday and, when asked to connect the caller with the manager, happily announced she was the manager on duty.

"Like to talk to you about the sales taxes you charge there."

Oops.

Sam quickly remembered her Blockbuster training and said she was "not allowed to give out any information" and that she "was not allowed to say anything."

She did agree to a request to try to locate someone who could address the issue.

Renters at Blockbuster's store at River and La Cañada also should be saving themselves a few nickels and more in sales taxes because the store is outside Tucson and outside Marana. But sales taxes there have been as unpredictable as a Robert Altman movie.

The purchase on June 13 of Goodfellas (a gift for a terrific, up and coming kid) for $16.99 and a Coke for $1.09 brought a $1.31 sales tax that was wrong no matter what amount it was assessed. At $18.08--counting the soda--the 5.6-percent tax should have been $1.01. Excluding the soda, the tax $1.31 on $16.99 was too much--7.7 percent--even if Blockbuster officials have the mistaken notion that this store is somewhere other than unincorporated Pima County. The tax on the movie alone should have been 95 cents.

Eleven days earlier, the same Blockbuster charged too little in sales tax--5 percent--on two rentals that totaled $7.58. The renter got off with just 38 cents in sales taxes that should have been 42 cents. The same renter got another break on June 14, when a new release at $3.79 kicked in a tax of only 10 cents, less than half of what it should have been at 5.6 percent.

All that may have been fixed last weekend with a $2.49 rental that carried a 14-cent tax, which, it must be noted, was accurate.

The late Richard Vonier, in an early issue (15 years ago) of his also late City Magazine, likened the gaudy intersection of Sunrise and Swan to Cairo. A likely place for Blockbuster, a Dallas-based company that raked in $4.16 billion in rentals worldwide last year. An infinitesimal amount of this year's profits dribbled off when Blockbuster's Sunrise and Swan store was too slow to collect the .6-percent sales tax for education. A $2.49 rental on June 4 triggered 12 cents in taxes--a 2-cent savings.

The governor won't be happy.

Not all failed. The Blockbuster at similarly frenetic Ina and Oracle roads on Saturday charged the proper amount in sales tax.


IT'S NOT EASY GETTING answers from Blockbuster. A woman named Erin answered a call and said she was the manager at the River-La Cañada store. She also fled from questions, but was nice enough to refer the Weekly to a Blockbuster regional human resources official.

Job opportunities?

Calls to a Blockbuster "Team Leader" for the Tucson area, which has 22 Blockbuster stores, were unavailing.

Tucson, Phoenix and about 18 of Arizona's major cities collect their own sales taxes. The roughly 70 other municipalities rely on the state Department of Revenue to collect and distribute sales tax.

Kay Gray is the director of finance for the city of Tucson. The department includes the revenue section for businesses, which typically assess city and state sales taxes, then forward the money to the governments separately once a month.

It is not uncommon for retailers to improperly charge incorrect sales tax amounts, Gray said.

"We do come across this," Gray said. "It leaves us with the dilemma of what to do with the money. In this case (Blockbuster at River Center and at River and La Cañada) it should be refunded to the taxpayers, but there are hundreds of them. More often, we find they paid the wrong government," something that has occurred on the northwest side where Tucson and Marana have battled for commercial centers.

It is unclear if the money from the extra 2 percent charged consistently by the River Center Blockbuster went to the city.

Richard Putz, the revenue director for Gray's finance department, says he will find out through Blockbuster's business license here and, possibly, with audit work.

Jeff Kros, a lawyer who serves as the spokesman for the state Department of Revenue, says the city of Tucson is on its own in addressing the Blockbusters that have charged city sales tax. On the issue of the Blockbuster that was too slow in charging the .6-percent education sales tax effective June 1, Kros said audits will reveal underreporting. The state then pursues the missing amount, interest and penalties.

Refunds are another matter. And not simple if Blockbuster doesn't simply own up to its mistakes. Retailers who claim they paid the state too much in sales taxes must offer detailed proof on amounts, transactions, customers and even customers' addresses.

Blockbuster's got them.

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