4 ms·

Technically, there is no VAT in the US. There is sales tax, and it can vary from city to city. I guess that is why it is not included in the price by default.

• koyote 8y ago
  Yep; sales tax, VAT, GST, they are all pretty much the same thing. And the fact that in the US they vary by location was what I was alluding to. > I guess that is why it is not included in the price by default I hear that argument a lot but it does not really make sense to me. The place of purchase knowns what their tax rate is in their current location because the cash register has that information (and I assume this sales tax does not change very frequently?). So why not print out or display the prices with that tax included?
  • gok 8y ago
    No, they are not the same thing. You pay VAT on the value added at each part of the process. So a retailer pays VAT to their wholesaler, unlike American state sales tax systems.
    • koyote 8y ago
      Which is why I said 'pretty much'. In this discussion they can be regarded as the same thing.
    • icebraining 8y ago
      Yeah, but the retailer then deducts that VAT from the amount charged to the customer, so in the end it's the same, only the final customer pays VAT.
    • steve_gh 8y ago
      No. VAT is across the supply chain, provided they are all VAT registered. So as a business you only pay The net VAT between sales and purchases.
      • gok 8y ago
        Er, that's what I said/meant? This is unlike US sales tax, which is only applied at the end, and on the entire value of the sale, not the value added. Edit: Ok I see, the "you" I had in my post was confusing. VAT is charged on the value added at each point of the chain, again unlike sales/use tax.
  • spc476 8y ago
    That's fine for a local store, but what about a regional chain? Or even a national chain? What price to they advertise? Or do they need to do different advertising per tax district? (which could be city, county and/or state)
    • koyote 8y ago
      Do as the rest of the world does and include the tax in the price. Margins will obviously change between stores in different tax districts but arguably that phenomenon is already priced in today's profits: A store on the California to Oregon border has to price in the fact that their customer base could buy the same product with zero sales tax across the border.
      • spc476 8y ago
        McDonald's is offering a 99₵ burger as part of a nation wide promotion. Where I live (Florida) it's $1.06 with tax. In Oregon, it would be 99₵ (no sales tax). In North Carolina, it's $1.03 except Ashville, North Carolina has a 7% tax rate so it would be $1.07 there. What price does McDonald's advertise for their promotion?
        • koyote 8y ago
          99cent. In Europe they have a 1 euro menu regardless of what country the burger was sold in (countries have different VAT rates). Some advertising is even shared between smaller countries that speak the same languages.
        • kwhitefoot 8y ago
          > What price does McDonald's advertise for their promotion? I really don't care, it's their problem not mine. All I want is for stores, fast food places, etc., to be honest about the price I am to pay. In Europe, including the UK, it is illegal to advertise only tax-exclusive prices to end customers.
          • tialaramex 8y ago