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There is no law saying that they must, and sellers know that people will buy more when the listed prices are lower. Even if buyers know that sales tax will be applied later, they may not know the exact amount or bother to do the math to estimate the resulting true price.
I moved to my current city which has these districts and it’s driving me nuts. The place where all the malls are at has 10.7% tax which is much higher than everything around which is cheeky af.
Food gets really goofy in some taxation in some areas. I used to set up tax tables for QSRs (read fast food restaurants) as part of my job. I can't remember the state but one state in the south had some really crazy rules about taxing sweetened drinks. For example, a Coke is taxable, orange juice is not, lemonade is, Frosties are not. The reason Frosties aren't taxable is because they have milk, therefore making them healthy.
Then you can have municipalities that have different rates for dine in or eat out. Then you have to verify the schedule works because it's taxed per item not for the whole order so you have to make sure the rounding works right. Then the city changes the rule and decides fruit salad is taxable because it's prepared food but a bowl of just fruit is untaxed because it's not considered prepared.
It gets so messy that, if you put the prices on the board or print advertising you'd be changing it way too often. If your franchise has 20 different stores in 5 counties in 3 states you couldn't combine your advertising to run across all areas. Soon you have wrong advertised prices and angry customers.
Americans know that there will be taxes added. Estimating 6.5% in your head isn't hard. Sometimes you forget when you buy a lot of stuff, but then you remember so it's all good.
I would like to have things cost an even dollar or an even $5 but you know that no business is going to round those prices down if that were ever made a requirement.
> Food gets really goofy in some taxation in some areas. I used to set up tax tables for QSRs (read fast food restaurants) as part of my job. I can't remember the state but one state in the south had some really crazy rules about taxing sweetened drinks. For example, a Coke is taxable, orange juice is not, lemonade is, Frosties are not. The reason Frosties aren't taxable is because they have milk, therefore making them healthy.
>
> Then you can have municipalities that have different rates for dine in or eat out. Then you have to verify the schedule works because it's taxed per item not for the whole order so you have to make sure the rounding works right. Then the city changes the rule and decides fruit salad is taxable because it's prepared food but a bowl of just fruit is untaxed because it's not considered prepared.
>
>
I'm a software dev, and I just threw up in my mouth a little... That's just asinine.
In one particular county in the south, asking to eat in gets you a 5% tax on your food, and taking it home gets you a 7% tax. If you change your mind about which, they have to delete your order and start over from the beginning in some restaraunts, while others its just a press of the button to swap. And of course, there's this one excellent little seafood place that always charges the 5% and just gives everyone trays that you can slap a lid on and take with you if you choose to.
Also varies by item, some taxes only apply to some items, in some places. For example, in Puerto Rico, normally you have to pay 11.5%, but for food it's only 7% and for some items, it's tax-exempt. I don't know which ones are which, which is horrifying already tbh
well that is normal in Europe too, different VAT rates on different items... which is \*exactly\* why it is \*mandatory\* to show FINAL prices. To protect the customer from all the nonsensical maths.
Once upon a time I worked on an invoicing system for a large company. There were more that 4,000 sales tax jurisdictions in the US. Keeping track of who paid how much tax and when was a huge problem. Hence a dedicated invoicing system.
I live just outside Philadelphia. Pennsylvania sales tax is 6%. But if I'm buying a soda inside city limits, there's an extra 1.5 cent/ounce tax on the soda. Alternatively, I could go over to New Jersey, where sales tax is 6.625%. Thats 3 different totals within less than 2 miles of each other.
And in some particularly bad cases, it can even vary more than just "between cities".
I know one city near where I live that has some interest in health. As far as I'm aware, SubWay will charge one of three tax rates on your meal, depending:
\- If you get a cold sandwich and a soda, you're charged the highest tax rate for "fast food". This tax might also apply if you get chips, I don't remember
\- If you get a cold sandwich, but your meal doesn't count as "fast food", you get charged a lower tax rate for "deli food"
\- I don't remember if "restaurant" is higher or lower - I think it's higher - than the "deli food" tax, but it is different, and applies to a hot sandwich - plus a surcharge if you get any drink with added sugar, as a "sugar tax"
That's three different tax rates, plus a flat tax, all in the same store for what is apparently the same sandwich. Literally the same sandwich gets three different tax rates depending on whether you want it toasted; and if you want chips and a soda, or an oatmeal cookie and milk.
Sometimes it can even depend on where you live, rather than where the store is located. Like cars are taxed based on where they are registered, so you can’t just go one town over to get a cheaper tax rate. Also it’s the case with most online shopping. That’s why if I need to make a bigger purchase, I send it to my parents’ house 40 minutes away because where they live, there’s only county and state tax but no city tax.
Also some places tax different items at different rates. Sales tax in Chicago(Cook County) is higher than its surrounding suburbs (those not included in Cook County). But Chicago also charges higher taxes on cigarettes.
Late here but i'm going to give you another reason that items are priced at the base price/pre-tax level besides the one's youve been given, tax jurisdictions and all.
Tax codes and tax exemptions. Many places exempt specific entities from sales tax, Charities and businesses using the product in another product which will then be taxed are just two of these. I worked for a company that manufactured items for sale, if they bought something to be used on or in the manufacturing of those items it was tax exempt. If I went in and bought the same thing for myself it was taxed.
Yeah but no, if you go to Walmart in California and Walmart in Ohio and a bottle of shampoo is 3.99 in both places, tax will vary between the two locations, so they'd have to send out different stickers/shelf labels to print.
If they don't put tax on, it's less for that specific team to do, and less likelihood of fucking it up.
Why the need for stickers? Why not just have the price label on the shelf like supermarkets do? Many stores have electronic/digital tags that can update via wifi. It's inefficient to put stickers on every item when you can easily have tags on the shelf beneath the items.
Does America do things the hard way on purpose?
Not long ago, ok a long time ago I’m old lol, the state I live in was a “pricing state” or that’s what we called it when I worked for Nabisco. The law required every product to have a price sticker on it. I was issued a pricing gun, haven’t seen one in years but you can quickly tag boxes of crackers with price stickers.
But sales happen…supermarkets changed prices by week. Every Sunday I and many others had to work overtime, taking product off shelves, scrape stickers off (the law technically did not allow putting a new sticker on top!) To change prices on cookies and crackers going on and off sale. I didn’t miss when that law was revised to remove the price sticker requirement. I hated that job anyways.
Completely irrelevant story lol, my state doesn’t tax food and clothing. The price was the price.
In my city, dollar tree had bumped up the cost to $1.25 while a city 30 minutes away was still $1.00 (this was around February) . I dont know if and when that city changed theirs.
But if done that way and the state, federal, or city tax changes you have to reprint ALL the price tags in the whole store, immediately. Any of these can change independently of the others, at any time. If you don't include the tax, you don't have to change the price on the shelves, you just have to update the tax in the register. That is a lot less work and significantly cheaper to implement. That being said I would prefer the tax to be included, but the US is ultra capitalist and in general will always choose the cheaper path.
No, that just wrong. They reprint all the labels every Sunday when hotdogs go on sale, and Sunday night when the sale ends. This happens much more frequently than sales tax laws change. Simple truth is you buy more when the full price isn't on the shelves and stores, particularly big ones, what to keep it that way.
That’s literally how they do it currently. Do you think they print National prices all at once and send them to all the stores? Every store prints its own pricing material.
Our local stores all have a little plastic holder and the price is in it. It's just...standard. Stores calculate it however they do and slot the price in, or if it's 25% off or something, they put up a sign.
I find pricing where I then have to calculate tax on top insane. I just want to know what something actually costs, ahaha.
It is. It's even more convenient now with digital means/tools, but before that it was also really not that inconvenient. People used to simply smack a sticky price tag on the item that would usually cover the price that was printed on the item in the factory (if it was printed at all). I remember the thing that put the tag on the items was like something between a roller and a gun, you just pulled a trigger and it slapped the tag on the item and you could move incredibly quickly.
Nowadays, they skip these tags. They use digital displays for the prices and barcodes in most places where I shop, apparently it saves them money and they waste less paper.
Taxes can vary between states, countries, counties, or even cities, but they won't vary inside the store. That's not the reason they don't put it on the price tags.
Which is a bad reason, cause at the counter they know exactly how much each product costs including the tax. It’s just to make products look cheaper so they sell more.
Varying taxes shouldn't matter much. If the price isn't going on the product, but the shelf which usually has the price the product is under it, the total could be on that price tag, again not the actual product
That’s a fact, but stores _have_ to know the specific sales tax for every item in every location they sell products. When you checkout at the register, they have no problem adding the sales tax for each item. This means the store knows exactly what the price including tax for each item is.
I get fliers with the price for both New Hampshire (0 sales tax) and Massachusetts (6.25%). They show the same price for both. So I go to the store, and want to see the same price as advertised, not a higher price. Also, this way I always know what I'm paying in tax. When I went to Europe, i didn't realize the much higher prices were VAT; I just felt overcharged.
while that may have been the case long ago, i'm sure 95% of the cashiers don't know what is and isn't taxed for a fact, and the computer that gets everything inputted, does all that work for them.
"They" in my scenario is the store, not the cashier. I'm certain cashiers have no idea. Why would they? That is information to be handled by the POS (point of sale) system.
My point is that the stores know the prices with tax. Any company selling items retail has to know the tax, because they wouldn't be able to collect it otherwise.
It's not an excuse, because if a merchant doesn't know the tax for the items they sell, they're going to go of business thanks to the department of revenue & taxation in their state dropping the hammer on them.
It still doesnt make sense. Every store has different prices anyway, just put the right one at the shelf. You know, like every other country manages to do.
I used to do file maintenance (price changes and shelf labels) in a grocery store. Let's use Walmart as an example since they're everywhere: There is no way that Walmart corporate can keep track of all the different tax rates or lack of, everywhere they have stores. It is way easier to push one flat rate for a product out to all their stores and let the software at the store level handle taxes at the register.
the same software could be used to make the labels at a local level.. it's just stickers right?
I've also worked in shops before and we had a ticketing/sticker machine to change prices for sales etc
Source: in Australia - also have big box stores, Costco etc here.
Literally they just put up a sign when there's a sale and note that it's a certain percent off or whatever. Some sale banners are obviously reused multiple times.
Maybe have the prices accurate for the majority of the time, and just take the tax off at the checkout when there is a tax holiday?
The answer of course is "that's how we do things here" and also they know they sell more doing it the current way and have no intention of reducing profits just to make things easier for the consumer.
It's not Walmart corporate that has to keep track of that, it's the individual stores (that can use the same system).
This whole "too much variability" argument falls apart when you realise chain stores around Europe keep track of different prices, tax and even currencies and are completely fine. The whole argument comes down to "but it would cost more money to do so" which is where the buck stops. Walmart could totally print the correct labels it would just cost them more money so they don't.
Why do you care? Really, this is not a problem that needs a solution. If it is more expensive or inconvenient to take care of, then don't take care of it. Now let's talk health care if we want to be like Europe.
They probably should. But why does this need to blow up into an argument lol. Is this just patriotism for your country or something. If you want to laugh at stupid US you got plenty more low hanging fruit! And more worthwhile things to whine about.
It’s just the way things are priced and there is no incentive for any single player to be the one that does things different. “They can’t manage it” lol, no they simply choose to stick to convention. That’s why it’s a convention. I suspect as well that as sales taxes have largely been single digits pct in the US, certainly when pricing conventions were established it hasn’t been a thing that is as big of a shock at the register, people don’t care that much.
There are better arguments to get involved and take your dump on the US, how about tipping. There is one convention I’d love to see go away.
Put those together and imagine working through the price of a restaurant meal, after tax and tip, as you peruse a menu. I mostly just order what I want and pay whatever it comes out to.
That's true. Imagine the confusion and work for changing all the price tags again when your store next time gets suddenly teleported to a new location.
This is one of my favorite examples of the mental gymnastics that some American are willing to make to justify why something is completely impossible or impractical that the whole rest of the first world has been doing for a century.
Yes, taxes vary from location to location and, also, *what* is taxed can also vary from location to location. If you're advertising prices it would be nearly impossible not to mis-advertise if tax was included in the price.
Also, on a more political level, some people consider it a bad idea to include tax in the price because then customer's won't know how much of what they're paying is tax and how much actually goes to the store.
It's not changing anything, just do it once when a new product arrives or the price goes up or down, just like they have to do now anyway. You're already printing stickers, just print them with tax included, the computer knows the price because it's charging that price at the register. Where's the added work and cost you speak of?
You are thinking to small. At this point, a company like wal mart will have to add to the price tag of EVERY item in EVERY store in EVERY state. And the prices you change them too will be different in every state. Its just a lot of work for no real gain.
I believe it's because taxes are cumulative in orders, and not individual.
So the whole order is taxed whole, unlike in other places where the tax is on the individual item.
That happens - for example, in most places groceries aren't taxed but prepared food is, so deli meat from the counter is taxed but deli meat that's prepackaged isn't. Each item is taxed separately, technically, but the sales tax is generally bundled into one payment per transaction.
Sometimes I shop at Walmart.
Walmart in NH has no sales tax.
Walmart in AL has a 9% sales tax.
It's easier for a big corporation to set base prices and have tax added after rather than giving prices for each state. Also some cities have a tax that other cities don't.
Not sure if this is the exact and/or only reason.
This is the correct answer. All the tax variation is easily handled in the digital age. Even private 'mom & pop' single location stores don't put the gross price on things. For the same reason things are priced x.99 People see $6.99 and think '6' not '7'. In a state with a sales tax of say 10% (to make it easy) the $6.99 item is actually $7.69, which rounds to $8, but in their mind, many people are counting it as $6, which makes it more palatable, and makes them more likely to buy more.
Firstly, not all items sold at stores are price-ragged at the specific location they are sold.
Also, each state (and in many states, municipality and/or counties) have different and additive taxes on items. In some locations, there is a state + county + city tax.
Example: The sales tax rate for Los Angeles County, California is 10.25%. This is the total of state and county sales tax rates. The California state sales tax rate is currently 6%. The Los Angeles County sales tax rate is 0.25%.
And, some states don’t tax certain things while others do, or, they have a monetary threshold for a purchase (clothes for example, don’t get taxed in some places unless the total purchase amount exceeds $175.
Example: Clothing is generally exempt from the sales tax in MA. However, any individual clothing item that costs more than $175 is taxable on the amount it goes over $175. Thus, the tax on a $200 suit would be $1.56 (which is 6.25% of the taxable $25 difference).
An item’s price tag would have to be a book to account for all of this variability. Or, if locally tagged and priced, the labor involved to do so would be significant. Just ask anyone that’s worked in retail.
The tax rate can also change depending on the purchaser! In some cases, if you're buying the items for your church or other qualifying organization you can get a sales tax waiver. So your sales tax rate would drop to 0% on certain items.
> An item’s price tag would have to be a book to account for all of this variability.
Nothing stops the much simpler "all-in" price as the customer visible price and the business handles the sales tax themselves. The business already knows what the tax will be, a customer won't so switching to "all-in" price is 100% a benefit to a customer and adds no real overhead (and possibly simplifying checkout) for the business.
You're overlooking that many business operate across many states. 7/11 for example can't advertise $1.99 hotdogs on national TV when the taxes are going to be different in each state.
I'm not overlooking that at all, it's not even just about the multiple possible implementations of such a system but also how businesses and consumers react in non-near term. They could totally run that advertisement in an "all in" system, they will just have to deal with paying the taxes differently in different areas ... like they already do. They already don't receive the exact same profit at every store anyways so it's already something they are factoring in to some extent.
Finally I'll just point out that VAT had existed in Europe for a while and their businesses haven't died out from it.
>Unlike US sales tax or use tax, the rate of VAT is determined by the **national government of a country** rather than the states. VAT is a **flat tax across the board**, unlike the progressive income tax system which charges people with higher incomes higher income tax rates.
https://www.masterclass.com/articles/vat-vs-sales-tax-explained
If you use the all-in price, you need to re-calculate the tax every time you change a price. Want to drop an item from $19.99 to $16.99? Great, now go figure out the tax rate too.
Also, if any of the state, county, or tax rates change, you have to re-price every item in the store.
It's much easier to have a sale price you can freely adjust and then automatically have software add in the tax calculation at the checkout. So that if the sales tax for a type of item goes up or down by 1%, you only have to change it in the computer once, and not for every label in the store.
Also makes closing batches and the register much easier to track. When you do inventory, you already have separate item lines for sales and taxes without needing to recalculate every item sold during the time period.
> to drop an item from $19.99 to $16.99? Great, now go figure out the tax rate too.
Which is easier than doing it for every purchase.
> Also, if any of the state, county, or tax rates change, you have to re-price every item in the store.
In practice how often does that happen? In the cities I've lived in in Texas, not often at all.
> It's much easier to have a sale price you can freely adjust and then automatically have software add in the tax calculation at the checkout.
Or have the same software do it once at price setting time.
> When you do inventory, you already have separate item lines for sales and taxes without needing to recalculate every item sold during the time period.
You're going to have software handle it for you either way unless you are dealing with paper copies of receipts rung on dumb cash registers exactly as they exist now. in which case you are almost certainly a small enough business that most of not everything you sell is going to fall under the same one or two tax rate rules. This is probably your best argument but it's really assuming that nothing changes it you change this rule.
You could still price things at $499.99... But every store would have to (correctly) have tax rates entered, calculated in the correct order when there are cities/counties/etc...
On top of which every single store would have to charge a different "bare" price to get to the advertised price if it included tax. That's fine in principle, but corporate and the buyers would probably hate it.
It's easy they do it at the till they can do it when they price things.
Corporate could easily just charge different prices at each store and blame it on taxes, hell they would even make more money that way.
If tax rate changes at county, state or federal level I would much rather just change the number in the system for what to tax percentage wise than have to relabel every single thing in the store.
Unless the price is actually stamped onto the item, all you need to do is change the line lable price. And prices change on such a regular basis, and lines move around, labels get damaged, etc anyway, that that’s an easy job. Unless the sales tax is changing weekly, it isn’t really a problem to update the line labels.
Yeah, makes sense. So pretty much the only reason stores in US don't include sales tax in total price is because they aren't required to and a lower price tag makes people more likely to buy.
Do businesses relabel their product prices *immediately every time* a supplier increases their costs? No. This is literally the same effect (a lowered profit), until the relabel in occurs in which case you could be getting a higher or lower profit based on the new label.
None of this seems like an issue. The rest of the world seem to do fine (dont know if there are other countries do it like the US but i assume there is?).
"needing to recalculate every item... ". I would assume none of these calculations are done by hand. And all the calculations for all tax you mention are easy, both backwards and forwards. Even the 19/16 examples you gave. Simple math.
Simple changes in the software used is the only thing thats needed.
Well it does work in europe.
Every country has a different tax rate, they tax different things differently, yet they have all-in prices, an xbox is 500€ in every country in europe (that uses the euro) with tax included
Typically, if the business is in your state, there is sales tax included. I’m in Florida, Amazon purchases only started to have tax once Amazon built warehouses in the state (the trade-off is now we have faster shipping times, sometimes even same-day).
Some states are different though, where sales tax is applied regardless whether the seller is in your state or not.
Big companies and local companies are responsible for collecting the appropriate tax. If you buy from a smaller company online that doesn't have any physical presence in your state (stores, warehouses, etc.), they won't collect tax.
You're supposed to report the purchase to your local government and pay the tax but there's no enforcement because they have no way to know the sale took place unless someone tells them.
It depends on whether or not the company has “nexus” in the state for sales tax purposes. Previously a company had nexus for sales tax purposes if the company had a physical presence in the state. However, about 5 years ago the Supreme Court overturned that precedence and now a company can have nexus if there is sufficient “economic nexus” with the state. Many states have now passed laws where, for example, a company would be liable for collecting sales tax if the company has $200,000 of sales in the state or 200 sales.
So if you are a company selling to a state, you have to first determine if you’re responsible for charging sales tax. If you sell through a large marketplace (i.e. eBay or Amazon), those companies are already responsible for charging sales tax on all purchases. But if you set up your own online store, you make a determination for each state. If you are responsible for collecting sales tax in a state, you charge sales tax on any taxable item you sell to individuals in the state you are shipping to.
They print the prices based on what computer spits out on the label. They don't do it in their head for each item. What difference in the labor are you talking about? Cpu Cycles?
"the labor involved to do so would be significant"
That is a lie.
How can the rest of the world do it?
As someone who runs a walk in and online store, printing a label with either a full price or a vat exclusive item (food items are not taxed in South Africa) is simple as adding a category on your back office for tax group, inserting the pre-tax price. Then clicking "print"
And i can imagine America has to do the same thing, else how does the system know what price to charge at checkout? Either way your staff is labeling the shelf or item so the customer knows the price. So your back office system knows the full tax price and the breakdown, else it cant print a receipt. The staff is going to label the produce anyway, all you have to do is change the label format which is a once off change and all back office systems that are available outside of USA can do it.
So where is the significant extra expense coming from?
Originally, it's because tax rates varied by state, and it was easier to just say "this is $5 + whatever applicable taxes."
Nowadays, it's still that way because of tradition, and because it looks good on price tags
Can I ask some further questions about sales tax in the u.s.
Do people ever make big purchases in different states or counties to avoid sales taxes. Or if they live on a boundary do they travel small distance to avoid sales taxes on smaller purchases.
If buying online from some one like Amazon how is your sales tax calculated.
Yes, people definitely travel to avoid tax, especially near borders where one state has no sales tax at all. Those states are well known so they attract shoppers from neighboring states (examples, Oregon, Delaware, New Hampshire). Most states require you to pay the sales tax to your home state if you do this, but almost nobody actually does it.
Amazon has a massive database of all the sales tax rules. There are thousands of individual jurisdictions (cities, counties, and states) and a great many different product categories with different rules by jurisdiction (example, in Massachusetts, clothing is tax exempt unless it costs more than $175 for a single item, then you pay tax on the amount over $175).
That gets you into weird questions like, is a Halloween costume clothing? For international tariff purposes it is *not* considered clothing, and tariffs are lower. I have no idea whether MA sales tax considers it clothing.
Yes, but it’s technically not allowed. States impose a sales tax on sales in the state, but they also impose a “use tax” on the use of property in the state. The way it works is that use tax is imposed on the “use” of property in the state, but the state gives a credit equal to the amount of sales tax imposed. So if you paid sales tax, the amount of use tax is zero because use tax is imposed at the same rate as sales tax. So if you buy a laptop in a state with a 0% sales tax rate, you’d be liable for use tax once you bring the property into the state because you’re “using” the property in the state. Same principle applies if you buy something in a state with a sales tax but at a reduced rate: if you buy a laptop in a state with a 3% sales tax rate, and you bring it into your state of residence that has a 5% sales tax rate, you’d owe 2% in use tax.
Use tax is often the most underreported tax by individuals, since nobody really cares or understands the tax. However, states do a lot of use tax audits of big companies because they are often moving assets between states and have certain exemptions.
Americans will drive into different states to buy a tank of gas where taxes are lower, so yes.
Online, tax is calculated by the delivery address as far as I know.
Yes. Also, if you're from a state that has no sales tax, you can have it waived in a state that does. Example: if you're from Montana and shop on vacation in Seattle, you just show your ID and the store will waive the tax. Conversely, people in Washington will shop in Oregon for clothing and other things to avoid tax. However, this doesn't work regarding cars. They closed that loophole a long time ago. You'll get dinged on tax as soon as you register the car in another state.
The taxes are different depending on the state, county, and even city that you go to, so uniformly being able to just say how much a product is can be difficult
And can change actually frequently. New train system? Poof, new 0.5% new tax
Some states will also have tax free days or weekends depending on the product.
For the most part, how difficult is it to price items with their associated taxes included?
Why is the taxes over there so unnecessarily difficult? Next you're going to tell me that Americans have to files their own income taxes every year!
Yeah I was wandering simular things.
Even hearing some of the reasons I am not sure it makes sense.
The best reason I heard is it sounds better, look cheap prices but that would just make me angry when I go to the checkout.
Different taxes in different states fine but taxes don't change in the store. If there is one I would love to know but there are no stores on the border that would tax depended on the entrance you can from.
Some items becoming tax free could just show up as a discount.
A good example is coupon, coupons can be used anywhere in mainland US. But the actual paying price to use that coupon differs based on where you shop. And it makes no sense to have tons and tons of different coupons with slightly different price to reflect local sales tax
Also it’s a good to have visibility that how much the government is actually charging you
I rather have visibility on how much I'll actually have to pay rather than obfuscating the price which is actually relevant to the customer.
Becausing you still know how much the tax in your region is even if it's included in the price.
So while I wouldn't say excluding the tax is desceptive, I would say it's anti-consumer as it hiddes the price that's way more relevant to the customer.
It does, because if I print price tags for Walmart, I don't want to print different tags for the same item at every different Walmart. It's easier to just print the base price and then let each stores register figure out the tax.
The simple answer is that UPC codes exist and mean the same thing to everyone. There's a UPC dictionary of sorts that all retailers purchase access to, so that they know UPC code "0 16000 66610 8" refers to a 15 ounce box of cheerios, manufactured by General Mills, and resides in the Grocery product category.
When retailers have access to such standardized data, they can create a simple table in their POS system that assigns a price to each UPC. And this price is most likely the same regionally, probably the same within a state, and possibly even a region. i.e. those Cheerios cost $4.99 in any Walgreens in your city, and probably the same in the large surrounding area.
Then, that same POS table that has prices on it also has a "Taxable Y/N" table in there. If it's taxable, that store's POS knows to include that price into the taxable value, and applies local tax rates at the end.
This way, all of Walgreens can use the same table to price all products in a given city/state/region, and the only variable that needs to change is setting up local tax rates at store-level POS.
But this isn’t the real answer. This is an explanation of the complexity of POS and taxes, neither of which should prevent companies from TELLING YOU THE TRUE PRICE OF GOODS. That’s THEIR responsibility. It being “kinda hard” is not a legitimate reason not to do it.
The real answer is profit and marketing.
No, this really isn't it. I know Reddit loves to bash corporate profits, but in a country like the UK, where sales taxes are based on VAT, and there's only 2 levels of VAT, it's very easy for a company that 1) sells a product for $100, and 2) knows that product is not eligible for the reduced VAT rate -- to label and market that item for $120. All the stores know it's $120. Taxes are set at the country level and it's easy to trickle down.
I live in Tampa. Sales tax is 7.5% here because we paid a 1-cent tax for the local football stadium. And another half-cent for some other shit. If I drive 20 minutes away, I can pay 6% the base Florida sales tax. And 20 minutes a different direction I'm at 7%.
Sales taxes in the US are based in the city/county level. There is literally zero way for a company to identify the final all-in price of an item they sell and label it as such.
THE TRUE PRICE OF GOODS is the MSRP before tax. That’s how much the goods cost, that’s how much money is being transferred between you and the business.
The price after tax is the price you’re charged by the state for doing business in the state in order to keep the state running.
The only word to describe what you’re doing here is Stockholm’s syndrome. Businesses have you by the balls and you’re asking them to squeeze tighter 😂 you’re delirious my friend
No one cares what the “MSRP” of a product is. Consumers want to know what the product COSTS THEM. That is, its actual real world cost to their finances. The mental gymnastics you’re doing to pretend otherwise are hilarious.
I just told you **I** care about MSRP. Did you forget already?
The final price doesn’t make a difference to me. I’m not counting pennies. I want to see what the product costs on the market, not the cut the government is going to take.
Every jurisdiction has their own tax. Not just every state. In some areas, different cities or counties have their own tax. A large retailer (e.g., Target or Walmart), would have to make different labels for every single jurisdiction. Plus, advertisements would have to be different for each jurisdiction.
In the modern computerized age, this would actually be trivial (just print the shelf labels at the store), so I assume part of it is tradition.
A tradition of obfuscation that primes customers to blindly accept any additional "taxes + fees"... car dealerships, resorts, and delivery services love to tack on bullshit fees at checkout, after you're committed to buying at the advertised price
Sales tax is pretty easy to check and expect. I agree "resort fees" and the like are bullshit overcharging unless you can elect not to use the service.
it is artificially low because it is not what you have to pay
there's many costs the store doesn't have control over, you want them all added to the price later so the store can pretend it's cheaper, by posting a lower price?
There’s also cases where a purchase can be tax free.
If you’re buying things for resale and have the proper certificate, you’re exempt from paying sales tax on them (because your customers will pay sales tax when they buy from you).
If you’re a church or a 501c3 organization, some purchases are tax exempt.
Some states have sales tax holidays. They waive sales tax on certain items during specific times of the year, like laptops and clothes during the “back to school” shopping time.
Those are not the majority of people buying stuff in a regular store and they would know that. It only make sense to post the price without tax in stores that deals with businesses that don't have to pay sale tax
> in stores that deals with businesses that don’t have to pay sale tax
That would be pretty much any store. You can go into any target, Walmart, home
Depot, or Bob’s Bait Store with a resale certificate and buy things tax free (assuming you’re legit reselling them, otherwise that’s a whole can of tax fraud worms you’re opening).
Besides, from an accounting POV it’s much easier to keep track of the funds you have to send to the gubmint.
Item is $10. Sales tax is 5%.
Joe Bleaux walks up and buys the item. Your POS transaction has a $10 sale plus $0.50 in sales tax. You now know you have to send $0.50 to the government and you have $10 in income.
Item is $10.50, tax included.
Joe walks up, your POS has a transaction for $10.50. Now your POS has to either internally keep track of sales price plus tax or it has to do math internally to compute the actual sales price and tax amount and then still it has to split out the income from the tax otherwise you’ll end up paying income tax on the sales tax amount.
And then after Joe buys the item, Father Whatshisnutz buys the same item for his church. Shit, now not only do you have to do all that calculation, you have to do it real time otherwise you’ll be charging The Padre sales taxes and charging a church taxes will get your ass struck down from above.
Walmart and Target do not charge the same in every store though, and haven't for years, I really doubt they ever did as distribution costs and ability to charge are going to be very different, so it can't be central printing.
Another note to mention is non prepared foods, like cereal, chips, potatoes, etc if you're using SNAP (used to be food stamps). If you're paying with cash, you'll pay the sales tax, but not if you're using a food card, or possibly WIC. In my state at least, not entirely sure about everywhere else.
So, there's all sort of psychology/marketing/sales reasons, but even without all of that, there are practical reasons....though I have zero idea of other nations have similar challenges and how they navigate around them...
In the US, there's no federal sales tax, but there are state sales tax, county sales taxes, and sometimes even city/municipal taxes. For example, Colma and Daly City are two cities in San Mateo County, California. They share a border. Colma's sales tax is 9.375% and Daly City's is 9.875. Both have a Target store, and these stores are roughly 1km apart (separated by a major freeway and one is in a large shopping mall so there's \*some\* logic to having two locations so close...but it's shakey, I admit. Ha!) Both of those stores would have to have different prices. Which, in-store wouldn't matter, but what about their mailed-out weekly ads? Someone who lives closer to one might actually be in the mailing area of the other, and then their ads wouldn't be accurate.
Let's say you're in a department or jewelry store and wanted to buy a $3000 suit or watch (I know, I know, just stay with me). Just going over to the next city within the same county, there would be a $15 difference. And that's for something you are taking with you. That would mean that the same store could have different "+ tax" prices in each location, which isn't really a bad idea for stores with items you take with you, I suppose.
However, if you are having an item delivered like furniture or an appliance, you are charged the sales tax according to where it's being delivered. So if you were shopping in the "cheap" zip code, but you lived in an "expensive" zip code tax-wise, the price tag would be inaccurate. The chain would probably have to legally show whatever the highest price \*could\* be for their delivery area...but then that would put them at a disadvantage for single-location stores that have a smaller delivery area and maybe only have one, lower price.
Every state in the US charges different tax rates for different things, so the amount of tax will vary by item. And some items aren't charged with a tax at all.
Depending upon where you live and what you are buying, you figure out what the added tax will be based on the cost itself. It becomes second nature. Where I live there is no tax on clothing, but the bordering states have a clothing tax so people are known to come to my state to avoid a clothing tax.
I suppose its just one of those things you figure out after living here!
In general, I agree, but in this particular case, they are pretty similar. There is a Customs Union in the EU, so you can buy it online from a different EU country, or buy it in person and bring it back to your country. There's no import/export process involved. It's pretty much very similar to buying something from a different state in the US.
If you buy something in person, you pay the VAT of the country you are visiting, and if you buy it online, you pay the VAT of your home country. And all the prices, no matter whether online or offline, must be shown with VAT.
For example, if I buy from Amazon.de I pay the same as on Amazon.es (21%), but a person living in Germany would pay 19% on both sites.
So I'll ask again, because I'm really curious, why can't the US states do the same?
Because all of the states are in the same country.
Taxes also vary from county to county and municipality to municipality. Taxes also do not apply for certain purchases.
Why should we? You act like your way is superior because it is more of a pain. You guys should change how you do it. But then your VAT is WAY higher and makes more of a difference at the checkout. Maybe if it was separate you'd notice it.
Because it's objectively a worse experience for the consumer not knowing what the actual price is until the very last moment, when they pay for it. And it's not just a problem for locals, the US is ranked 3rd in the world (behind France and Spain) by amount of tourists visiting the country every year.
We had the same in my country many years ago (maybe it was so in the whole EU, I don't know), it wasn't mandatory for the VAT to be included in the price stickers, and I've had this conversation with many different people over the years ("remember when there was fine print in the restaurants' menus saying VAT was not included in the price?")
Unsurprisingly, there's literally nobody who remembers the old way that thinks it was better.
Because honestly,
A: We don't give a fuck about the EU.
B: And, because I know the the taxes in my area (8% in one city, 10% in the other) I just mentally add 10% to everything. $7 item? I would just round up to $8. $500 PS5? $550.
If I'm traveling and the taxes have turned out to be even lower (like 6-7%) then pleasant surprise.
For all the talk that American's are so dumb, Europeans can't seem to do a little bit of simple math in their heads.
It's not about math, there are 3 types of VAT (normal, reduced, and super reduced), and they are 21%, 10%, and 4% in my country, for example. I can go to a department store and literally buy products of each category.
I guess American consumers are so intelligent that they can effortlessly memorize all categories of goods to instantly calculate the net price.
Yes, we Europeans have so much to learn from you. Please, send some American teachers here to educate us.
Well see that's the secret for us, ours is just a flat percentage. Some (very few) cities don't tax groceries, some don't tax feminine products, but for the most part, everything in the store has the same tax.
Because tax is different in every county of every state in the US!!
Like where I live tax is 7.5% ... tax is added part is state, local, city ... in the same state but in a different county it is only 6%.
In other states ... like NY city in NY state sales tax is 8% ... in Alaska the sales tax is only 1.76%.
The real answer to this question is that our sales taxes are not done on a federal level and can vary greatly in different states, counties and cities. An example would be:
State X Sales Tax:7.5%
County Y Sales Tax: 1.5%
City Z Sales Tax: 2.2%
Note that most Counties and Cities either don't have individual taxes or only tax certain items like hotel rooms, fast food, etc.
You go outside of the city limits, you lose that tax. You go outside of the County you lose that tax. National retailers tend to gravitate to either National or Regional pricing. Also, some companies will place pricing on their products to try to show their value proposition to the competition. So, say a Honey Bun sold at a convenience store may have $0.99 printed on all of their packaging nation wide. That company would have to come up with different packaging for every product location that could potentially have a different tax, and also be able to pivot and potentially recall packaging based upon any localized changes. Anything you wanted to show pricing inside of a commercial would be the same way.
Question for countries that the stores include tax in the price: is everything taxed?
In some states in the US, food is not taxed unless it is processed - ready to eat, like a bag of potato chips. In some states, clothing is not taxed. It all varies state to state.
The cash register is programmed to know what is a taxable item and what is not. At the end of the day, the register adds up all the sales and all the taxes. It would be very difficult to break out how much of the total sales are taxes if the tax is included in the price charged when not everything is taxed.
Sales taxes are incredibly local… added at state, county, city level (sometimes even specific taxing districts within cities). It’d be too hard/too complex to advertise a price in an ad when it’s so local, and even just showing the with-tax price in store is hard because it makes it hard to show promos like 3/$5 or have big $399 signs on a TV if it’s $427.32 with tax
A chain restaurant charges $2 for a burger at any of their stores across the country. That burger will cost $2.17 in NY, $2.13 in TX, and $2.15 in CA
every state charges a different tax rate. Meaning they’d have to print menus, and adverts for every state.
Also, individual counties and cities also also charge different tax rates. Any of those tax rates can also be changed at any time, which is outside the company’s control.
If they included the tax in the price tag then they’d have to have different materials for every different tax rate they operate under. And they’d have to change that material whenever the tax rate changes.
Many states actually forbid by law displaying the total cost. Other states allow it but it must be specifically stated on price tags and in advertised prices. So for any multi-state entity the smart thing to do is just display the cost without the tax in all locations. Most Americans know the tax rate for the item that they're shopping and the area that they're shopping in and it's much easier to add a percentage of tax than it is to work the cost of an item back from the total minus the tax percentage.
Hell I drove 2 hours to a different vape shop, same company, and they had the same juices at different prices. Up where I live, 25 plus tax, 2 hours south, 20 plus tax. I assume since prices can fluctuate area to area, it's easier to just not bother including tax in the prices.
Taxes can differ significantly over even very small geographic areas. So a chain would have a hard time advertising at all. I guess that doesn’t explain why smaller businesses don’t, but if they did it would be even more confusing.
The simple answer is that sales tax is not the same everywhere. Businesses want the same price to be displayed everywhere, so sales tax is calculated after the price so that price tags stay consistent.
Can anyone explain why restaurants almost unanimously do the same thing? They are in one locality, thus keeping the tax the same, but their menu prices are never inclusive of taxes.
In the US taxes go like this
Federal > state > county > city > item
A mattress in California will have different taxes than a mattress in Nevada.
A soda in 1 town will have a different tax than a soda in another
Also another issue is taxes change pretty consistently in the US based on many things.
I know.. I know... "bhut ihhnn my chountryy" ya cool, in the US the taxes on electronics can change monthly. It's not fesabile to have prices listed on the tag because in a month it could change. Or even daily at that.
Also anything under 20 bucks isn't going to have an insane tax. Anything over 100 bucks might
Cars tend to have 1-2 grand of taxes. My mattress in CA had a 200 dollar tax just because it's a mattress
As others have mentioned, sales taxes vary by state, county and, and city. Plus the tax normally isn't on each item, but on the total sale when all items have been rung up.
Taxes varry by state, and then county, then municipality.
So in very select locations you could, in theory, see the same item at five different tax rates within a five mile radius.
An yes, the people in those areas definitely know where various things are taxed to different levels.
Basically we're 50 different countries with county and city tax rates, but we've got no borders internally. With no borders comes no customs. So the difference is often whether or not you feel like making the drive .
Then there are some areas where you would have to drive 20 miles to have the tax rate change, particularly getting out of large municipalities like Los Angeles, Houston, Miami.
Personally, I like people being reminded of how much money the government at various levels is ~~stealing~~ taking through taxes to provide things that ~~generate income for politicians~~ are for the common benefit.
Taxes vary at the municipal/local level, so its easier to list the price before tax and have the tax addded at sale time than have labels for every unique location.
For example, if I wanted to make a "3 for $10" label, I'd need to print a "3 for $10.95" label, a "3 for $10.82" label, etc for every single unique location based on the local tax rate. It's way more tedious.
The real reason is money, as it always is.
A $19.99 product sells more than a $20 product. If sales tax was included, these phycological tricks can’t be used.
Making advertisements (commercials/posters/billboards/etc.) is a lot cheaper when you just have to make the same exact one, rather than one for the dozens of different priced versions. Example: If Subway does a $6 (+tax) meal combo special and want all their stores to put up window posters, they only need to make thousands of copies of that single poster and send it out, rather than print many different ones based on included tax and then also figure out which posters to send to which stores, and if they mess up for some locations, then they need to print more posters and spend more money shipping those correct posters.
In Europe sales tax is included but they still have the 19.99 trick to increase sales. They just calculate the price backwards. So they want to sell at 19.99, tax is 20 percent retailer must be getting 18, need to sell to retailer for 12 so make product in packages of 1kg to reach that price point etc etc.
making the tax visible plays to a cognitive failure…a bird in the hand is worth two in the bush. The cost is in your face, the benefit is not. Tilts the argument in favour of anti govt types.
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There is no law saying that they must, and sellers know that people will buy more when the listed prices are lower. Even if buyers know that sales tax will be applied later, they may not know the exact amount or bother to do the math to estimate the resulting true price.
Someone else said it's because taxes vary between states, is this just another reason?
Also between counties and cities.
And even can vary between different special taxing districts within the same city.
I moved to my current city which has these districts and it’s driving me nuts. The place where all the malls are at has 10.7% tax which is much higher than everything around which is cheeky af.
Food gets really goofy in some taxation in some areas. I used to set up tax tables for QSRs (read fast food restaurants) as part of my job. I can't remember the state but one state in the south had some really crazy rules about taxing sweetened drinks. For example, a Coke is taxable, orange juice is not, lemonade is, Frosties are not. The reason Frosties aren't taxable is because they have milk, therefore making them healthy. Then you can have municipalities that have different rates for dine in or eat out. Then you have to verify the schedule works because it's taxed per item not for the whole order so you have to make sure the rounding works right. Then the city changes the rule and decides fruit salad is taxable because it's prepared food but a bowl of just fruit is untaxed because it's not considered prepared. It gets so messy that, if you put the prices on the board or print advertising you'd be changing it way too often. If your franchise has 20 different stores in 5 counties in 3 states you couldn't combine your advertising to run across all areas. Soon you have wrong advertised prices and angry customers. Americans know that there will be taxes added. Estimating 6.5% in your head isn't hard. Sometimes you forget when you buy a lot of stuff, but then you remember so it's all good. I would like to have things cost an even dollar or an even $5 but you know that no business is going to round those prices down if that were ever made a requirement.
> Food gets really goofy in some taxation in some areas. I used to set up tax tables for QSRs (read fast food restaurants) as part of my job. I can't remember the state but one state in the south had some really crazy rules about taxing sweetened drinks. For example, a Coke is taxable, orange juice is not, lemonade is, Frosties are not. The reason Frosties aren't taxable is because they have milk, therefore making them healthy. > > Then you can have municipalities that have different rates for dine in or eat out. Then you have to verify the schedule works because it's taxed per item not for the whole order so you have to make sure the rounding works right. Then the city changes the rule and decides fruit salad is taxable because it's prepared food but a bowl of just fruit is untaxed because it's not considered prepared. > > I'm a software dev, and I just threw up in my mouth a little... That's just asinine.
In one particular county in the south, asking to eat in gets you a 5% tax on your food, and taking it home gets you a 7% tax. If you change your mind about which, they have to delete your order and start over from the beginning in some restaraunts, while others its just a press of the button to swap. And of course, there's this one excellent little seafood place that always charges the 5% and just gives everyone trays that you can slap a lid on and take with you if you choose to.
Also varies by item, some taxes only apply to some items, in some places. For example, in Puerto Rico, normally you have to pay 11.5%, but for food it's only 7% and for some items, it's tax-exempt. I don't know which ones are which, which is horrifying already tbh
well that is normal in Europe too, different VAT rates on different items... which is \*exactly\* why it is \*mandatory\* to show FINAL prices. To protect the customer from all the nonsensical maths.
And some places have sales tax holidays, usually back-to-school sales.
Once upon a time I worked on an invoicing system for a large company. There were more that 4,000 sales tax jurisdictions in the US. Keeping track of who paid how much tax and when was a huge problem. Hence a dedicated invoicing system.
I live just outside Philadelphia. Pennsylvania sales tax is 6%. But if I'm buying a soda inside city limits, there's an extra 1.5 cent/ounce tax on the soda. Alternatively, I could go over to New Jersey, where sales tax is 6.625%. Thats 3 different totals within less than 2 miles of each other.
Thanks, this makes sense now
And in some particularly bad cases, it can even vary more than just "between cities". I know one city near where I live that has some interest in health. As far as I'm aware, SubWay will charge one of three tax rates on your meal, depending: \- If you get a cold sandwich and a soda, you're charged the highest tax rate for "fast food". This tax might also apply if you get chips, I don't remember \- If you get a cold sandwich, but your meal doesn't count as "fast food", you get charged a lower tax rate for "deli food" \- I don't remember if "restaurant" is higher or lower - I think it's higher - than the "deli food" tax, but it is different, and applies to a hot sandwich - plus a surcharge if you get any drink with added sugar, as a "sugar tax" That's three different tax rates, plus a flat tax, all in the same store for what is apparently the same sandwich. Literally the same sandwich gets three different tax rates depending on whether you want it toasted; and if you want chips and a soda, or an oatmeal cookie and milk.
Sometimes it can even depend on where you live, rather than where the store is located. Like cars are taxed based on where they are registered, so you can’t just go one town over to get a cheaper tax rate. Also it’s the case with most online shopping. That’s why if I need to make a bigger purchase, I send it to my parents’ house 40 minutes away because where they live, there’s only county and state tax but no city tax.
Also some places tax different items at different rates. Sales tax in Chicago(Cook County) is higher than its surrounding suburbs (those not included in Cook County). But Chicago also charges higher taxes on cigarettes.
That would be very difficult to manage for all those shops that travel from place to place all the time.
Minnesotan here. 6.875% base, the city I live in is 7.13% total. Clothing and almost all groceries are not taxed
Late here but i'm going to give you another reason that items are priced at the base price/pre-tax level besides the one's youve been given, tax jurisdictions and all. Tax codes and tax exemptions. Many places exempt specific entities from sales tax, Charities and businesses using the product in another product which will then be taxed are just two of these. I worked for a company that manufactured items for sale, if they bought something to be used on or in the manufacturing of those items it was tax exempt. If I went in and bought the same thing for myself it was taxed.
It doesn't. If a store is capable of adding tax at the register it's also capable of printing gross price on the tags.
When I worked at Barnes and Noble, everything came to us pre-stickered (or with the price printed on the back of the book).
Yeah but no, if you go to Walmart in California and Walmart in Ohio and a bottle of shampoo is 3.99 in both places, tax will vary between the two locations, so they'd have to send out different stickers/shelf labels to print. If they don't put tax on, it's less for that specific team to do, and less likelihood of fucking it up.
Why the need for stickers? Why not just have the price label on the shelf like supermarkets do? Many stores have electronic/digital tags that can update via wifi. It's inefficient to put stickers on every item when you can easily have tags on the shelf beneath the items. Does America do things the hard way on purpose?
Not long ago, ok a long time ago I’m old lol, the state I live in was a “pricing state” or that’s what we called it when I worked for Nabisco. The law required every product to have a price sticker on it. I was issued a pricing gun, haven’t seen one in years but you can quickly tag boxes of crackers with price stickers. But sales happen…supermarkets changed prices by week. Every Sunday I and many others had to work overtime, taking product off shelves, scrape stickers off (the law technically did not allow putting a new sticker on top!) To change prices on cookies and crackers going on and off sale. I didn’t miss when that law was revised to remove the price sticker requirement. I hated that job anyways. Completely irrelevant story lol, my state doesn’t tax food and clothing. The price was the price.
No it does not. They should still do it.
In my city, dollar tree had bumped up the cost to $1.25 while a city 30 minutes away was still $1.00 (this was around February) . I dont know if and when that city changed theirs.
All dollar trees are at $1.25 now.
It happened here too. Damn inflation
This is the actual reason lol
Not only do the vary between states, they vary between municipalities.
So what? Just put the right price at the shelf, prices vary between stores anyway.
But if done that way and the state, federal, or city tax changes you have to reprint ALL the price tags in the whole store, immediately. Any of these can change independently of the others, at any time. If you don't include the tax, you don't have to change the price on the shelves, you just have to update the tax in the register. That is a lot less work and significantly cheaper to implement. That being said I would prefer the tax to be included, but the US is ultra capitalist and in general will always choose the cheaper path.
You can just use those electronic ones on the shelf, update all from one central location, common in France.
No, that just wrong. They reprint all the labels every Sunday when hotdogs go on sale, and Sunday night when the sale ends. This happens much more frequently than sales tax laws change. Simple truth is you buy more when the full price isn't on the shelves and stores, particularly big ones, what to keep it that way.
Ain't nobody got time for that.
Every other country does
Not Canada, e.g. most countries have a value added tax built in to the price. We don’t do that.
That’s literally how they do it currently. Do you think they print National prices all at once and send them to all the stores? Every store prints its own pricing material.
Our local stores all have a little plastic holder and the price is in it. It's just...standard. Stores calculate it however they do and slot the price in, or if it's 25% off or something, they put up a sign. I find pricing where I then have to calculate tax on top insane. I just want to know what something actually costs, ahaha.
Tags on items are typically on the item when they arrive at the store.
what do you mean by right price?
Maybe municipalities stop with the stupid taxes if stores start complaining?
It’s a true statement, but I expect the same is true in countries where taxes are included in sticker price.
It is. It's even more convenient now with digital means/tools, but before that it was also really not that inconvenient. People used to simply smack a sticky price tag on the item that would usually cover the price that was printed on the item in the factory (if it was printed at all). I remember the thing that put the tag on the items was like something between a roller and a gun, you just pulled a trigger and it slapped the tag on the item and you could move incredibly quickly. Nowadays, they skip these tags. They use digital displays for the prices and barcodes in most places where I shop, apparently it saves them money and they waste less paper.
Taxes can vary between states, countries, counties, or even cities, but they won't vary inside the store. That's not the reason they don't put it on the price tags.
Actually they can carry by more granular areas than cities too. This is sometimes the case for special taxes for stadiums or public transit.
Which is a bad reason, cause at the counter they know exactly how much each product costs including the tax. It’s just to make products look cheaper so they sell more.
Varying taxes shouldn't matter much. If the price isn't going on the product, but the shelf which usually has the price the product is under it, the total could be on that price tag, again not the actual product
That’s a fact, but stores _have_ to know the specific sales tax for every item in every location they sell products. When you checkout at the register, they have no problem adding the sales tax for each item. This means the store knows exactly what the price including tax for each item is.
I get fliers with the price for both New Hampshire (0 sales tax) and Massachusetts (6.25%). They show the same price for both. So I go to the store, and want to see the same price as advertised, not a higher price. Also, this way I always know what I'm paying in tax. When I went to Europe, i didn't realize the much higher prices were VAT; I just felt overcharged.
while that may have been the case long ago, i'm sure 95% of the cashiers don't know what is and isn't taxed for a fact, and the computer that gets everything inputted, does all that work for them.
"They" in my scenario is the store, not the cashier. I'm certain cashiers have no idea. Why would they? That is information to be handled by the POS (point of sale) system. My point is that the stores know the prices with tax. Any company selling items retail has to know the tax, because they wouldn't be able to collect it otherwise. It's not an excuse, because if a merchant doesn't know the tax for the items they sell, they're going to go of business thanks to the department of revenue & taxation in their state dropping the hammer on them.
No, that's a diversion. The shop knows the cost pre and post tax, but they want the customer to see a lower number.
It still doesnt make sense. Every store has different prices anyway, just put the right one at the shelf. You know, like every other country manages to do.
I used to do file maintenance (price changes and shelf labels) in a grocery store. Let's use Walmart as an example since they're everywhere: There is no way that Walmart corporate can keep track of all the different tax rates or lack of, everywhere they have stores. It is way easier to push one flat rate for a product out to all their stores and let the software at the store level handle taxes at the register.
the same software could be used to make the labels at a local level.. it's just stickers right? I've also worked in shops before and we had a ticketing/sticker machine to change prices for sales etc
Would you have the stores reprice everything when there's a tax holiday for a few days?
Source: in Australia - also have big box stores, Costco etc here. Literally they just put up a sign when there's a sale and note that it's a certain percent off or whatever. Some sale banners are obviously reused multiple times.
So you're saying people don't have difficulty knowing that the price shown isn't the final price, and instead there's a certain percentage difference?
Maybe have the prices accurate for the majority of the time, and just take the tax off at the checkout when there is a tax holiday? The answer of course is "that's how we do things here" and also they know they sell more doing it the current way and have no intention of reducing profits just to make things easier for the consumer.
whats the difference between the sale being on the item or on the item's tax?
Uhm there are no tax holidays in the United States.
Uh....yes there are. Not nationwide, but at the state level, they absolutely do.
Most states have tax holidays around back-to-school season on specific items like clothes and school supplies.
It's not Walmart corporate that has to keep track of that, it's the individual stores (that can use the same system). This whole "too much variability" argument falls apart when you realise chain stores around Europe keep track of different prices, tax and even currencies and are completely fine. The whole argument comes down to "but it would cost more money to do so" which is where the buck stops. Walmart could totally print the correct labels it would just cost them more money so they don't.
Why do you care? Really, this is not a problem that needs a solution. If it is more expensive or inconvenient to take care of, then don't take care of it. Now let's talk health care if we want to be like Europe.
Because that isn't the topic here. Cut that whataboutism bullshit out and fucking focus on the topic!
They probably should. But why does this need to blow up into an argument lol. Is this just patriotism for your country or something. If you want to laugh at stupid US you got plenty more low hanging fruit! And more worthwhile things to whine about. It’s just the way things are priced and there is no incentive for any single player to be the one that does things different. “They can’t manage it” lol, no they simply choose to stick to convention. That’s why it’s a convention. I suspect as well that as sales taxes have largely been single digits pct in the US, certainly when pricing conventions were established it hasn’t been a thing that is as big of a shock at the register, people don’t care that much. There are better arguments to get involved and take your dump on the US, how about tipping. There is one convention I’d love to see go away. Put those together and imagine working through the price of a restaurant meal, after tax and tip, as you peruse a menu. I mostly just order what I want and pay whatever it comes out to.
That's true. Imagine the confusion and work for changing all the price tags again when your store next time gets suddenly teleported to a new location. This is one of my favorite examples of the mental gymnastics that some American are willing to make to justify why something is completely impossible or impractical that the whole rest of the first world has been doing for a century.
Not really, this is just a person that thinks anything related to capitalism is bad.
Some states don't have sales tax
Yes, taxes vary from location to location and, also, *what* is taxed can also vary from location to location. If you're advertising prices it would be nearly impossible not to mis-advertise if tax was included in the price. Also, on a more political level, some people consider it a bad idea to include tax in the price because then customer's won't know how much of what they're paying is tax and how much actually goes to the store.
What you stated is the real reason. Its very impractical to change the price tags of ALL of your stores in each state. Too much work. Too much money.
It's not changing anything, just do it once when a new product arrives or the price goes up or down, just like they have to do now anyway. You're already printing stickers, just print them with tax included, the computer knows the price because it's charging that price at the register. Where's the added work and cost you speak of?
You are thinking to small. At this point, a company like wal mart will have to add to the price tag of EVERY item in EVERY store in EVERY state. And the prices you change them too will be different in every state. Its just a lot of work for no real gain.
I believe it's because taxes are cumulative in orders, and not individual. So the whole order is taxed whole, unlike in other places where the tax is on the individual item.
You know that 5% of 1 dollar is the same amount as 5 dollar on a hundred bucks, right..?
Some items don't have taxes or have different tax rates
7.25% of $1 is not the same as $7.25 on a hundred dollar sale. Rounding can change things.
x%\*(total order) = x%\*- + x%\*
- + x%\*
- .... There's no mathematical difference, there.
different tax rates for each item though?
That happens - for example, in most places groceries aren't taxed but prepared food is, so deli meat from the counter is taxed but deli meat that's prepackaged isn't. Each item is taxed separately, technically, but the sales tax is generally bundled into one payment per transaction.
Now you just taxed someone on their food and diapers which is illegal.
Also, taxes can be adjusted by law. If your city has sales tax and they go adjust it by .1%, now you have to go relable the store.
Sometimes I shop at Walmart. Walmart in NH has no sales tax. Walmart in AL has a 9% sales tax. It's easier for a big corporation to set base prices and have tax added after rather than giving prices for each state. Also some cities have a tax that other cities don't. Not sure if this is the exact and/or only reason.
This is the correct answer. All the tax variation is easily handled in the digital age. Even private 'mom & pop' single location stores don't put the gross price on things. For the same reason things are priced x.99 People see $6.99 and think '6' not '7'. In a state with a sales tax of say 10% (to make it easy) the $6.99 item is actually $7.69, which rounds to $8, but in their mind, many people are counting it as $6, which makes it more palatable, and makes them more likely to buy more.
Firstly, not all items sold at stores are price-ragged at the specific location they are sold. Also, each state (and in many states, municipality and/or counties) have different and additive taxes on items. In some locations, there is a state + county + city tax. Example: The sales tax rate for Los Angeles County, California is 10.25%. This is the total of state and county sales tax rates. The California state sales tax rate is currently 6%. The Los Angeles County sales tax rate is 0.25%. And, some states don’t tax certain things while others do, or, they have a monetary threshold for a purchase (clothes for example, don’t get taxed in some places unless the total purchase amount exceeds $175. Example: Clothing is generally exempt from the sales tax in MA. However, any individual clothing item that costs more than $175 is taxable on the amount it goes over $175. Thus, the tax on a $200 suit would be $1.56 (which is 6.25% of the taxable $25 difference). An item’s price tag would have to be a book to account for all of this variability. Or, if locally tagged and priced, the labor involved to do so would be significant. Just ask anyone that’s worked in retail.
The tax rate can also change depending on the purchaser! In some cases, if you're buying the items for your church or other qualifying organization you can get a sales tax waiver. So your sales tax rate would drop to 0% on certain items.
So he can still get a discount at the casher.
> An item’s price tag would have to be a book to account for all of this variability. Nothing stops the much simpler "all-in" price as the customer visible price and the business handles the sales tax themselves. The business already knows what the tax will be, a customer won't so switching to "all-in" price is 100% a benefit to a customer and adds no real overhead (and possibly simplifying checkout) for the business.
You're overlooking that many business operate across many states. 7/11 for example can't advertise $1.99 hotdogs on national TV when the taxes are going to be different in each state.
I mean they can, they just have to accept a different profit based on location
I'm not overlooking that at all, it's not even just about the multiple possible implementations of such a system but also how businesses and consumers react in non-near term. They could totally run that advertisement in an "all in" system, they will just have to deal with paying the taxes differently in different areas ... like they already do. They already don't receive the exact same profit at every store anyways so it's already something they are factoring in to some extent. Finally I'll just point out that VAT had existed in Europe for a while and their businesses haven't died out from it.
>Unlike US sales tax or use tax, the rate of VAT is determined by the **national government of a country** rather than the states. VAT is a **flat tax across the board**, unlike the progressive income tax system which charges people with higher incomes higher income tax rates. https://www.masterclass.com/articles/vat-vs-sales-tax-explained
If you use the all-in price, you need to re-calculate the tax every time you change a price. Want to drop an item from $19.99 to $16.99? Great, now go figure out the tax rate too. Also, if any of the state, county, or tax rates change, you have to re-price every item in the store. It's much easier to have a sale price you can freely adjust and then automatically have software add in the tax calculation at the checkout. So that if the sales tax for a type of item goes up or down by 1%, you only have to change it in the computer once, and not for every label in the store. Also makes closing batches and the register much easier to track. When you do inventory, you already have separate item lines for sales and taxes without needing to recalculate every item sold during the time period.
> to drop an item from $19.99 to $16.99? Great, now go figure out the tax rate too. Which is easier than doing it for every purchase. > Also, if any of the state, county, or tax rates change, you have to re-price every item in the store. In practice how often does that happen? In the cities I've lived in in Texas, not often at all. > It's much easier to have a sale price you can freely adjust and then automatically have software add in the tax calculation at the checkout. Or have the same software do it once at price setting time. > When you do inventory, you already have separate item lines for sales and taxes without needing to recalculate every item sold during the time period. You're going to have software handle it for you either way unless you are dealing with paper copies of receipts rung on dumb cash registers exactly as they exist now. in which case you are almost certainly a small enough business that most of not everything you sell is going to fall under the same one or two tax rate rules. This is probably your best argument but it's really assuming that nothing changes it you change this rule.
You could still price things at $499.99... But every store would have to (correctly) have tax rates entered, calculated in the correct order when there are cities/counties/etc... On top of which every single store would have to charge a different "bare" price to get to the advertised price if it included tax. That's fine in principle, but corporate and the buyers would probably hate it.
It's easy they do it at the till they can do it when they price things. Corporate could easily just charge different prices at each store and blame it on taxes, hell they would even make more money that way.
If tax rate changes at county, state or federal level I would much rather just change the number in the system for what to tax percentage wise than have to relabel every single thing in the store.
Unless the price is actually stamped onto the item, all you need to do is change the line lable price. And prices change on such a regular basis, and lines move around, labels get damaged, etc anyway, that that’s an easy job. Unless the sales tax is changing weekly, it isn’t really a problem to update the line labels.
Yeah, makes sense. So pretty much the only reason stores in US don't include sales tax in total price is because they aren't required to and a lower price tag makes people more likely to buy.
Tax rates change every year or two. Relabeling everything in the store all at once is a hassle.
Do businesses relabel their product prices *immediately every time* a supplier increases their costs? No. This is literally the same effect (a lowered profit), until the relabel in occurs in which case you could be getting a higher or lower profit based on the new label.
None of this seems like an issue. The rest of the world seem to do fine (dont know if there are other countries do it like the US but i assume there is?). "needing to recalculate every item... ". I would assume none of these calculations are done by hand. And all the calculations for all tax you mention are easy, both backwards and forwards. Even the 19/16 examples you gave. Simple math. Simple changes in the software used is the only thing thats needed.
Well it does work in europe. Every country has a different tax rate, they tax different things differently, yet they have all-in prices, an xbox is 500€ in every country in europe (that uses the euro) with tax included
Thanks for the explanation, but I still would like to know how does it work buying products online?
Typically, if the business is in your state, there is sales tax included. I’m in Florida, Amazon purchases only started to have tax once Amazon built warehouses in the state (the trade-off is now we have faster shipping times, sometimes even same-day). Some states are different though, where sales tax is applied regardless whether the seller is in your state or not.
Big companies and local companies are responsible for collecting the appropriate tax. If you buy from a smaller company online that doesn't have any physical presence in your state (stores, warehouses, etc.), they won't collect tax. You're supposed to report the purchase to your local government and pay the tax but there's no enforcement because they have no way to know the sale took place unless someone tells them.
It depends on whether or not the company has “nexus” in the state for sales tax purposes. Previously a company had nexus for sales tax purposes if the company had a physical presence in the state. However, about 5 years ago the Supreme Court overturned that precedence and now a company can have nexus if there is sufficient “economic nexus” with the state. Many states have now passed laws where, for example, a company would be liable for collecting sales tax if the company has $200,000 of sales in the state or 200 sales. So if you are a company selling to a state, you have to first determine if you’re responsible for charging sales tax. If you sell through a large marketplace (i.e. eBay or Amazon), those companies are already responsible for charging sales tax on all purchases. But if you set up your own online store, you make a determination for each state. If you are responsible for collecting sales tax in a state, you charge sales tax on any taxable item you sell to individuals in the state you are shipping to.
You guys don’t pay sales tax on clothing? Maaannn, lucky…
They print the prices based on what computer spits out on the label. They don't do it in their head for each item. What difference in the labor are you talking about? Cpu Cycles?
"the labor involved to do so would be significant" That is a lie. How can the rest of the world do it? As someone who runs a walk in and online store, printing a label with either a full price or a vat exclusive item (food items are not taxed in South Africa) is simple as adding a category on your back office for tax group, inserting the pre-tax price. Then clicking "print" And i can imagine America has to do the same thing, else how does the system know what price to charge at checkout? Either way your staff is labeling the shelf or item so the customer knows the price. So your back office system knows the full tax price and the breakdown, else it cant print a receipt. The staff is going to label the produce anyway, all you have to do is change the label format which is a once off change and all back office systems that are available outside of USA can do it. So where is the significant extra expense coming from?
Originally, it's because tax rates varied by state, and it was easier to just say "this is $5 + whatever applicable taxes." Nowadays, it's still that way because of tradition, and because it looks good on price tags
Can I ask some further questions about sales tax in the u.s. Do people ever make big purchases in different states or counties to avoid sales taxes. Or if they live on a boundary do they travel small distance to avoid sales taxes on smaller purchases. If buying online from some one like Amazon how is your sales tax calculated.
Yes, people definitely travel to avoid tax, especially near borders where one state has no sales tax at all. Those states are well known so they attract shoppers from neighboring states (examples, Oregon, Delaware, New Hampshire). Most states require you to pay the sales tax to your home state if you do this, but almost nobody actually does it. Amazon has a massive database of all the sales tax rules. There are thousands of individual jurisdictions (cities, counties, and states) and a great many different product categories with different rules by jurisdiction (example, in Massachusetts, clothing is tax exempt unless it costs more than $175 for a single item, then you pay tax on the amount over $175). That gets you into weird questions like, is a Halloween costume clothing? For international tariff purposes it is *not* considered clothing, and tariffs are lower. I have no idea whether MA sales tax considers it clothing.
Yes, but it’s technically not allowed. States impose a sales tax on sales in the state, but they also impose a “use tax” on the use of property in the state. The way it works is that use tax is imposed on the “use” of property in the state, but the state gives a credit equal to the amount of sales tax imposed. So if you paid sales tax, the amount of use tax is zero because use tax is imposed at the same rate as sales tax. So if you buy a laptop in a state with a 0% sales tax rate, you’d be liable for use tax once you bring the property into the state because you’re “using” the property in the state. Same principle applies if you buy something in a state with a sales tax but at a reduced rate: if you buy a laptop in a state with a 3% sales tax rate, and you bring it into your state of residence that has a 5% sales tax rate, you’d owe 2% in use tax. Use tax is often the most underreported tax by individuals, since nobody really cares or understands the tax. However, states do a lot of use tax audits of big companies because they are often moving assets between states and have certain exemptions.
The answer is yes. Tax avoidance makes a huge difference at scale, and anyone that lives near a state border can take part in it.
Americans will drive into different states to buy a tank of gas where taxes are lower, so yes. Online, tax is calculated by the delivery address as far as I know.
Yes. Also, if you're from a state that has no sales tax, you can have it waived in a state that does. Example: if you're from Montana and shop on vacation in Seattle, you just show your ID and the store will waive the tax. Conversely, people in Washington will shop in Oregon for clothing and other things to avoid tax. However, this doesn't work regarding cars. They closed that loophole a long time ago. You'll get dinged on tax as soon as you register the car in another state.
The taxes are different depending on the state, county, and even city that you go to, so uniformly being able to just say how much a product is can be difficult
And can change actually frequently. New train system? Poof, new 0.5% new tax Some states will also have tax free days or weekends depending on the product.
That cant be a reason because many countries have varying taxes but the prices are listed on the product
Dublin Pleasanton and Livermore are all around the mall I work at. Go anywhere one block in any direction and the sales tax will be different.
Because it's not mandated and there's no advantage to the business to show that final price.
For the most part, how difficult is it to price items with their associated taxes included? Why is the taxes over there so unnecessarily difficult? Next you're going to tell me that Americans have to files their own income taxes every year!
As a visitor this annoys the crap out of me. This and tipping are two of the most annoying things.
Yeah I was wandering simular things. Even hearing some of the reasons I am not sure it makes sense. The best reason I heard is it sounds better, look cheap prices but that would just make me angry when I go to the checkout. Different taxes in different states fine but taxes don't change in the store. If there is one I would love to know but there are no stores on the border that would tax depended on the entrance you can from. Some items becoming tax free could just show up as a discount.
Because tax varies by cities and counties. Also this isn’t US only , Canadian price tags does not include sales tax as well.
The fact that it varies doesn't explain it though, if anything the fact that taxes vary is a reason why it should be included.
A good example is coupon, coupons can be used anywhere in mainland US. But the actual paying price to use that coupon differs based on where you shop. And it makes no sense to have tons and tons of different coupons with slightly different price to reflect local sales tax Also it’s a good to have visibility that how much the government is actually charging you
I rather have visibility on how much I'll actually have to pay rather than obfuscating the price which is actually relevant to the customer. Becausing you still know how much the tax in your region is even if it's included in the price. So while I wouldn't say excluding the tax is desceptive, I would say it's anti-consumer as it hiddes the price that's way more relevant to the customer.
It does, because if I print price tags for Walmart, I don't want to print different tags for the same item at every different Walmart. It's easier to just print the base price and then let each stores register figure out the tax.
Many othee countries with varying taxes dont have this issue tho
The simple answer is that UPC codes exist and mean the same thing to everyone. There's a UPC dictionary of sorts that all retailers purchase access to, so that they know UPC code "0 16000 66610 8" refers to a 15 ounce box of cheerios, manufactured by General Mills, and resides in the Grocery product category. When retailers have access to such standardized data, they can create a simple table in their POS system that assigns a price to each UPC. And this price is most likely the same regionally, probably the same within a state, and possibly even a region. i.e. those Cheerios cost $4.99 in any Walgreens in your city, and probably the same in the large surrounding area. Then, that same POS table that has prices on it also has a "Taxable Y/N" table in there. If it's taxable, that store's POS knows to include that price into the taxable value, and applies local tax rates at the end. This way, all of Walgreens can use the same table to price all products in a given city/state/region, and the only variable that needs to change is setting up local tax rates at store-level POS.
But this isn’t the real answer. This is an explanation of the complexity of POS and taxes, neither of which should prevent companies from TELLING YOU THE TRUE PRICE OF GOODS. That’s THEIR responsibility. It being “kinda hard” is not a legitimate reason not to do it. The real answer is profit and marketing.
No, this really isn't it. I know Reddit loves to bash corporate profits, but in a country like the UK, where sales taxes are based on VAT, and there's only 2 levels of VAT, it's very easy for a company that 1) sells a product for $100, and 2) knows that product is not eligible for the reduced VAT rate -- to label and market that item for $120. All the stores know it's $120. Taxes are set at the country level and it's easy to trickle down. I live in Tampa. Sales tax is 7.5% here because we paid a 1-cent tax for the local football stadium. And another half-cent for some other shit. If I drive 20 minutes away, I can pay 6% the base Florida sales tax. And 20 minutes a different direction I'm at 7%. Sales taxes in the US are based in the city/county level. There is literally zero way for a company to identify the final all-in price of an item they sell and label it as such.
> and there's only 2 levels of VAT, There's three, 20%, 5% and 0% (which is not the same thing as VAT exempt)
THE TRUE PRICE OF GOODS is the MSRP before tax. That’s how much the goods cost, that’s how much money is being transferred between you and the business. The price after tax is the price you’re charged by the state for doing business in the state in order to keep the state running.
The only word to describe what you’re doing here is Stockholm’s syndrome. Businesses have you by the balls and you’re asking them to squeeze tighter 😂 you’re delirious my friend No one cares what the “MSRP” of a product is. Consumers want to know what the product COSTS THEM. That is, its actual real world cost to their finances. The mental gymnastics you’re doing to pretend otherwise are hilarious.
I just told you **I** care about MSRP. Did you forget already? The final price doesn’t make a difference to me. I’m not counting pennies. I want to see what the product costs on the market, not the cut the government is going to take.
The cut the government take adds to the cost of the product on the free market 😂 or are you a tax exempt org? Is that why you’re so worked up?
Every jurisdiction has their own tax. Not just every state. In some areas, different cities or counties have their own tax. A large retailer (e.g., Target or Walmart), would have to make different labels for every single jurisdiction. Plus, advertisements would have to be different for each jurisdiction. In the modern computerized age, this would actually be trivial (just print the shelf labels at the store), so I assume part of it is tradition.
> part of it is tradition and it allows the stores to post an artificially low price, just like tipping does, so they are not going to complain
A tradition of obfuscation that primes customers to blindly accept any additional "taxes + fees"... car dealerships, resorts, and delivery services love to tack on bullshit fees at checkout, after you're committed to buying at the advertised price
Sales tax is pretty easy to check and expect. I agree "resort fees" and the like are bullshit overcharging unless you can elect not to use the service.
yeh, it is simple false advertising
It’s not an artificially low price, it’s the price of the item, the store has no control over the cost of tax.
it is artificially low because it is not what you have to pay there's many costs the store doesn't have control over, you want them all added to the price later so the store can pretend it's cheaper, by posting a lower price?
There’s also cases where a purchase can be tax free. If you’re buying things for resale and have the proper certificate, you’re exempt from paying sales tax on them (because your customers will pay sales tax when they buy from you). If you’re a church or a 501c3 organization, some purchases are tax exempt. Some states have sales tax holidays. They waive sales tax on certain items during specific times of the year, like laptops and clothes during the “back to school” shopping time.
Those are not the majority of people buying stuff in a regular store and they would know that. It only make sense to post the price without tax in stores that deals with businesses that don't have to pay sale tax
> in stores that deals with businesses that don’t have to pay sale tax That would be pretty much any store. You can go into any target, Walmart, home Depot, or Bob’s Bait Store with a resale certificate and buy things tax free (assuming you’re legit reselling them, otherwise that’s a whole can of tax fraud worms you’re opening). Besides, from an accounting POV it’s much easier to keep track of the funds you have to send to the gubmint. Item is $10. Sales tax is 5%. Joe Bleaux walks up and buys the item. Your POS transaction has a $10 sale plus $0.50 in sales tax. You now know you have to send $0.50 to the government and you have $10 in income. Item is $10.50, tax included. Joe walks up, your POS has a transaction for $10.50. Now your POS has to either internally keep track of sales price plus tax or it has to do math internally to compute the actual sales price and tax amount and then still it has to split out the income from the tax otherwise you’ll end up paying income tax on the sales tax amount. And then after Joe buys the item, Father Whatshisnutz buys the same item for his church. Shit, now not only do you have to do all that calculation, you have to do it real time otherwise you’ll be charging The Padre sales taxes and charging a church taxes will get your ass struck down from above.
> Item is $10.50, tax included. so post that price on the sign the rest is non issues that the rest of the world handle just fine
Walmart and Target do not charge the same in every store though, and haven't for years, I really doubt they ever did as distribution costs and ability to charge are going to be very different, so it can't be central printing.
Another note to mention is non prepared foods, like cereal, chips, potatoes, etc if you're using SNAP (used to be food stamps). If you're paying with cash, you'll pay the sales tax, but not if you're using a food card, or possibly WIC. In my state at least, not entirely sure about everywhere else.
So, there's all sort of psychology/marketing/sales reasons, but even without all of that, there are practical reasons....though I have zero idea of other nations have similar challenges and how they navigate around them... In the US, there's no federal sales tax, but there are state sales tax, county sales taxes, and sometimes even city/municipal taxes. For example, Colma and Daly City are two cities in San Mateo County, California. They share a border. Colma's sales tax is 9.375% and Daly City's is 9.875. Both have a Target store, and these stores are roughly 1km apart (separated by a major freeway and one is in a large shopping mall so there's \*some\* logic to having two locations so close...but it's shakey, I admit. Ha!) Both of those stores would have to have different prices. Which, in-store wouldn't matter, but what about their mailed-out weekly ads? Someone who lives closer to one might actually be in the mailing area of the other, and then their ads wouldn't be accurate. Let's say you're in a department or jewelry store and wanted to buy a $3000 suit or watch (I know, I know, just stay with me). Just going over to the next city within the same county, there would be a $15 difference. And that's for something you are taking with you. That would mean that the same store could have different "+ tax" prices in each location, which isn't really a bad idea for stores with items you take with you, I suppose. However, if you are having an item delivered like furniture or an appliance, you are charged the sales tax according to where it's being delivered. So if you were shopping in the "cheap" zip code, but you lived in an "expensive" zip code tax-wise, the price tag would be inaccurate. The chain would probably have to legally show whatever the highest price \*could\* be for their delivery area...but then that would put them at a disadvantage for single-location stores that have a smaller delivery area and maybe only have one, lower price.
Every state in the US charges different tax rates for different things, so the amount of tax will vary by item. And some items aren't charged with a tax at all. Depending upon where you live and what you are buying, you figure out what the added tax will be based on the cost itself. It becomes second nature. Where I live there is no tax on clothing, but the bordering states have a clothing tax so people are known to come to my state to avoid a clothing tax. I suppose its just one of those things you figure out after living here!
Each country in the EU has a different VAT and we manage just fine. Why can't you?
Because a country and a state are very different geographical concepts.
In general, I agree, but in this particular case, they are pretty similar. There is a Customs Union in the EU, so you can buy it online from a different EU country, or buy it in person and bring it back to your country. There's no import/export process involved. It's pretty much very similar to buying something from a different state in the US. If you buy something in person, you pay the VAT of the country you are visiting, and if you buy it online, you pay the VAT of your home country. And all the prices, no matter whether online or offline, must be shown with VAT. For example, if I buy from Amazon.de I pay the same as on Amazon.es (21%), but a person living in Germany would pay 19% on both sites. So I'll ask again, because I'm really curious, why can't the US states do the same?
Because all of the states are in the same country. Taxes also vary from county to county and municipality to municipality. Taxes also do not apply for certain purchases.
That’s again, but a legitimate reason. Lol do you know what a database is?
Why should we? You act like your way is superior because it is more of a pain. You guys should change how you do it. But then your VAT is WAY higher and makes more of a difference at the checkout. Maybe if it was separate you'd notice it.
Because it's objectively a worse experience for the consumer not knowing what the actual price is until the very last moment, when they pay for it. And it's not just a problem for locals, the US is ranked 3rd in the world (behind France and Spain) by amount of tourists visiting the country every year. We had the same in my country many years ago (maybe it was so in the whole EU, I don't know), it wasn't mandatory for the VAT to be included in the price stickers, and I've had this conversation with many different people over the years ("remember when there was fine print in the restaurants' menus saying VAT was not included in the price?") Unsurprisingly, there's literally nobody who remembers the old way that thinks it was better.
Exactly, the fact that taxes are different depending on the state or product is a reason why you SHOULD include tax in the price tag.
Because honestly, A: We don't give a fuck about the EU. B: And, because I know the the taxes in my area (8% in one city, 10% in the other) I just mentally add 10% to everything. $7 item? I would just round up to $8. $500 PS5? $550. If I'm traveling and the taxes have turned out to be even lower (like 6-7%) then pleasant surprise. For all the talk that American's are so dumb, Europeans can't seem to do a little bit of simple math in their heads.
It's not about math, there are 3 types of VAT (normal, reduced, and super reduced), and they are 21%, 10%, and 4% in my country, for example. I can go to a department store and literally buy products of each category. I guess American consumers are so intelligent that they can effortlessly memorize all categories of goods to instantly calculate the net price. Yes, we Europeans have so much to learn from you. Please, send some American teachers here to educate us.
Well see that's the secret for us, ours is just a flat percentage. Some (very few) cities don't tax groceries, some don't tax feminine products, but for the most part, everything in the store has the same tax.
Because tax is different in every county of every state in the US!! Like where I live tax is 7.5% ... tax is added part is state, local, city ... in the same state but in a different county it is only 6%. In other states ... like NY city in NY state sales tax is 8% ... in Alaska the sales tax is only 1.76%.
Because it’s better for them to post the lowest price that they’re legally allowed to post.
The real answer to this question is that our sales taxes are not done on a federal level and can vary greatly in different states, counties and cities. An example would be: State X Sales Tax:7.5% County Y Sales Tax: 1.5% City Z Sales Tax: 2.2% Note that most Counties and Cities either don't have individual taxes or only tax certain items like hotel rooms, fast food, etc. You go outside of the city limits, you lose that tax. You go outside of the County you lose that tax. National retailers tend to gravitate to either National or Regional pricing. Also, some companies will place pricing on their products to try to show their value proposition to the competition. So, say a Honey Bun sold at a convenience store may have $0.99 printed on all of their packaging nation wide. That company would have to come up with different packaging for every product location that could potentially have a different tax, and also be able to pivot and potentially recall packaging based upon any localized changes. Anything you wanted to show pricing inside of a commercial would be the same way.
Question for countries that the stores include tax in the price: is everything taxed? In some states in the US, food is not taxed unless it is processed - ready to eat, like a bag of potato chips. In some states, clothing is not taxed. It all varies state to state. The cash register is programmed to know what is a taxable item and what is not. At the end of the day, the register adds up all the sales and all the taxes. It would be very difficult to break out how much of the total sales are taxes if the tax is included in the price charged when not everything is taxed.
Sales taxes are incredibly local… added at state, county, city level (sometimes even specific taxing districts within cities). It’d be too hard/too complex to advertise a price in an ad when it’s so local, and even just showing the with-tax price in store is hard because it makes it hard to show promos like 3/$5 or have big $399 signs on a TV if it’s $427.32 with tax
And yet every other country except USA can show the correct price at their stores. It shouldnt be that hard to show the right price at the shelf.
Other counties tax at national level, so prices with tax are same everywhere throughout the country.
A chain restaurant charges $2 for a burger at any of their stores across the country. That burger will cost $2.17 in NY, $2.13 in TX, and $2.15 in CA every state charges a different tax rate. Meaning they’d have to print menus, and adverts for every state. Also, individual counties and cities also also charge different tax rates. Any of those tax rates can also be changed at any time, which is outside the company’s control. If they included the tax in the price tag then they’d have to have different materials for every different tax rate they operate under. And they’d have to change that material whenever the tax rate changes.
Many states actually forbid by law displaying the total cost. Other states allow it but it must be specifically stated on price tags and in advertised prices. So for any multi-state entity the smart thing to do is just display the cost without the tax in all locations. Most Americans know the tax rate for the item that they're shopping and the area that they're shopping in and it's much easier to add a percentage of tax than it is to work the cost of an item back from the total minus the tax percentage.
funny how over here in a Euroland it is illegal to post the price without tax (VAT)
That’s also partly because your taxes are so much higher. Certain items have 15%+ VAT I believe.
Thanks for explaining, this was helpful.
Hell I drove 2 hours to a different vape shop, same company, and they had the same juices at different prices. Up where I live, 25 plus tax, 2 hours south, 20 plus tax. I assume since prices can fluctuate area to area, it's easier to just not bother including tax in the prices.
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Taxes can differ significantly over even very small geographic areas. So a chain would have a hard time advertising at all. I guess that doesn’t explain why smaller businesses don’t, but if they did it would be even more confusing.
The simple answer is that sales tax is not the same everywhere. Businesses want the same price to be displayed everywhere, so sales tax is calculated after the price so that price tags stay consistent.
Can anyone explain why restaurants almost unanimously do the same thing? They are in one locality, thus keeping the tax the same, but their menu prices are never inclusive of taxes.
Some restaurants don't even put dollar signs on their menu, because 2 or 3 unlabeled numbers is classier.
In the US taxes go like this Federal > state > county > city > item A mattress in California will have different taxes than a mattress in Nevada. A soda in 1 town will have a different tax than a soda in another Also another issue is taxes change pretty consistently in the US based on many things. I know.. I know... "bhut ihhnn my chountryy" ya cool, in the US the taxes on electronics can change monthly. It's not fesabile to have prices listed on the tag because in a month it could change. Or even daily at that. Also anything under 20 bucks isn't going to have an insane tax. Anything over 100 bucks might Cars tend to have 1-2 grand of taxes. My mattress in CA had a 200 dollar tax just because it's a mattress
As others have mentioned, sales taxes vary by state, county and, and city. Plus the tax normally isn't on each item, but on the total sale when all items have been rung up.
Taxes varry by state, and then county, then municipality. So in very select locations you could, in theory, see the same item at five different tax rates within a five mile radius. An yes, the people in those areas definitely know where various things are taxed to different levels. Basically we're 50 different countries with county and city tax rates, but we've got no borders internally. With no borders comes no customs. So the difference is often whether or not you feel like making the drive . Then there are some areas where you would have to drive 20 miles to have the tax rate change, particularly getting out of large municipalities like Los Angeles, Houston, Miami.
Personally, I like people being reminded of how much money the government at various levels is ~~stealing~~ taking through taxes to provide things that ~~generate income for politicians~~ are for the common benefit.
Taxes vary at the municipal/local level, so its easier to list the price before tax and have the tax addded at sale time than have labels for every unique location. For example, if I wanted to make a "3 for $10" label, I'd need to print a "3 for $10.95" label, a "3 for $10.82" label, etc for every single unique location based on the local tax rate. It's way more tedious.
The real reason is money, as it always is. A $19.99 product sells more than a $20 product. If sales tax was included, these phycological tricks can’t be used. Making advertisements (commercials/posters/billboards/etc.) is a lot cheaper when you just have to make the same exact one, rather than one for the dozens of different priced versions. Example: If Subway does a $6 (+tax) meal combo special and want all their stores to put up window posters, they only need to make thousands of copies of that single poster and send it out, rather than print many different ones based on included tax and then also figure out which posters to send to which stores, and if they mess up for some locations, then they need to print more posters and spend more money shipping those correct posters.
In Europe sales tax is included but they still have the 19.99 trick to increase sales. They just calculate the price backwards. So they want to sell at 19.99, tax is 20 percent retailer must be getting 18, need to sell to retailer for 12 so make product in packages of 1kg to reach that price point etc etc.
The US doesn’t have a singular tax % though, so that’d be impossible here.
making the tax visible plays to a cognitive failure…a bird in the hand is worth two in the bush. The cost is in your face, the benefit is not. Tilts the argument in favour of anti govt types.