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Sales tax in the US is not a Value Added Tax, so putting just the post tax price on the sticker is not actually enough, the sticker would need the pre-tax price
by jsmith45 4y ago
Sales tax in the US is not a Value Added Tax, so putting just the post tax price on the sticker is not actually enough, the sticker would need the pre-tax price too, as some purchases can be exempt from sales tax.
Most VAT based countries have a single VAT rate for the whole country (or possible a country-wide set of rates for different types of products). The United States is not like that. Even if we consider an individual state as the equivalent to Country, each state does not have one consistent sales tax rate.
Typically the state will have one rate, the county can have its own rate, the city its own rate, and potentially even special districts with their own sales tax rates.
That complicates things a lot. For example, if a law required the shown prices to include tax, it would mean that an online website cannot show you the price until you have entered your exact street address. Most people don't want to tell the website where they live just to find out a price that may not be any good.
The variable tax rate means that if the law applied to advertised prices shown on say TV, it would not be possible to have nationwide advertisements that show a price, or even statewide advertisements, or in some cases not even city-wide advertisements. (Unless they set a post-tax price based on what they can sustain with the highest tax rate, which means charging people in lower tax areas a higher price than they would otherwise have charged, just to be able to mention a price at all on TV). Unless the law allowed "between $x and $y depending on your local tax rate" (where X and Y are based on the lowest and highest tax rate for the advertising area).
Most people who want such post tax pricing laws would not be terribly happy with a law that allowed advertising a range like that.
- cowpig 4y ago> Unless the law allowed "between $x and $y depending on your local tax rate" (where X and Y are based on the lowest and highest tax rate for the advertising area). What's wrong with this solution? Getting rid of sales tax would be the best solution imo but complicated
- b112 4y agoVery complicated. Getting rid of consumption tax, means income tax is the sole source for citizen taxation. To replace consumption tax, which ensures those with large savings, yet no income, still get taxed as they spend, you'd have to somehow have full disclosure of all assets, and tax that, along with all the privacy implications. And just imagine all the work, with every citizen's assets being examined yearly. Of course, there are other options, but not many which replace consumption tax.
- harles 4y agoThis seems like speculation not based in reality. Do Montana, Alaska, Oregon, Delaware, or New Hampshirite do this?
- b112 4y agoI don't know. They do still have federal sales tax I presume, and get kickbacks from the federal level for projects? Some places may also benefit from high property tax, which now that I think of it, is a "holding" tax, not income tax.
- leesalminen 4y agoThere is no federal sales tax. If you go to a store in Delaware there is no sales tax of any kind charged.
- ensignavenger 4y agoAlaska gets a lot of money from natural resources. New Hampshire gets a lot of money from property taxes. They do have sales tax on a few items, but call it something else (I think restaurants and hotels?). I don't know about the other states.
- cowpig 4y agoThere are many other taxes. There are tariffs, capital gains, or estate taxes, for example. Additionally, not all consumption taxes are across-the-board sales taxes. Across-the-board sales taxes are highly regressive taxes, because basic consumption needs are relatively flat across a population, so the poorest people pay a much higher percentage of their income in sales taxes than the wealthy.
- b112 4y agoYes, so here, Canada, we tend to make that flat sales tax more complex, so some groceries are excempt, some meals, etc. Which makes it harder for people to know all the ins and outs of...
- jgeada 4y agoI've heard this excuse, that tax situation is too complicated, and never understood it. The store knows to charge me the correct value, including all appropriate taxes, when I come to pay. So the data clearly is there, and therefore choosing not to show it to me up front is indeed bait-and-switch. They're telling me a price that is not going to be what they'll actually charge me.
- b112 4y agoThey aren't charging you sales tax. The governement is, and they force the store into being their tax collector too. It is a very important distinction.
- leesalminen 4y agoAre you advocating requiring user registration with an address and login just to view products on an e-commerce site? I would dislike that far more than just knowing my sales tax rate is X% and to factor that in my head. I’d probably do significantly less online shopping if I had to register to see products.
- wizofaus 4y agoLots of possible solutions to that though, for unregistered users you could have an option to select sales tax % that would default based on location if you let the site access it. How many different sales tax rates actually exist in the US and how often do they change?
- leesalminen 4y agoSure, I agree there are probably some half-useful middle ground solutions. There are thousands of different sales tax rates in the US that change multiple times per year. Each city, county, state and other things like metro transit districts, water districts and school districts can all contribute to the sales tax rate paid by an individual at the point of sale.
- yibg 4y ago
- leejoramo 4y agoJust to add another layer of complexity. Many landlords and development companies add on percentage based fees. Some merchants will report these on recipes as PIF Tax (Property Improvement Fees). These are not a technically a tax, but impact the consumer the similarly Even if you are tax exempt or buying non-taxable items like food, the property own still collects PIF. PIFs are in the contract between the landlord and merchant the actual details of how fees work are not publicly know. Merchants may benefit from actual property improvements, or the fees are entirely a profit stream for the landlord.
- ensignavenger 4y agoI have never seen this- where have you seen it? I know some places pay a % of their sales to their landlord, but I have always seen that included in their advertised price.
- leejoramo 4y agoI have seen it at a number of places in Colorado. The local supermarket I go to shows 1% PIF tax
- cpwright 4y agoWith a car it is even more complicated, because the sales tax is based on the county you register it in - not the county that the dealership is in.
- midoridensha 4y ago>Typically the state will have one rate, the county can have its own rate, the city its own rate, and potentially even special districts with their own sales tax rates. There's a simple solution to this: stop doing this. Ban cities and districts from having their own sales taxes. There's no reason to allow this. In my country, there's a single national sales tax that's the same everywhere. The US's problems are a result of its own stupid decisions.
- dfadsadsf 4y agoMy guess is that your country is much smaller than US (in both population and territory) and what’s more important have strong central government with only minor powers delegated to local authorities. That’s just not US where central government is responsible for fewer things and has strong local authorities that actually responsible for most things that you encounter day to say. (though unfirtunately central gov power is creeping up)
- midoridensha 4y ago>though unfirtunately central gov power is creeping up Nothing unfortunate about it: that decentralization is the cause of most of the problems.
- Auracle 4y agoIn my state if I photograph a wedding and give the client a flash drive of the photos, I need to charge them sales tax on the entire wedding. If I just deliver the photos online, there’s no sales tax. If they (or a family member) later purchase prints through their online gallery that are essentially drop shipped to them? Who the hell knows.
- hbossy 4y agoStickers in Europe show both pre and post-tax prices. Online sales just charge you with the tax of their origin country. Anyway difficulty to advertise is no reason to not show real prices on in-store stickers.