4 ms·

I was surprised a few years ago to learn that in some parts of Europe, it's common to include the sales tax in the price on the shelf. That makes quite a lot of

I was surprised a few years ago to learn that in some parts of Europe, it's common to include the sales tax in the price on the shelf. That makes quite a lot of sense to me, but here in the states shelf prices are often just the sale price - taxes are only shown at checkout.

beachy 3y ago
This is the law in NZ at least. When selling to consumers, you must include the GST in the displayed price. If selling to businesses, you can display the price excluding GST.
devanl 3y ago
Taxes in the US are locality sensitive. The county sales tax rate varies by almost a full percentage between counties where I live, so depending on whether I ship something to my home or to the office, the amount of sales tax due is different.
- missedthecue 3y ago
  I think it's also worth pointing out that the US doesn't have VAT. In Europe, VAT tax averages over 21%. And this increases even further if you have locally imposed taxes. This substantially impacts purchase price. In the USA, all sales taxes on your item added together are usually just a few percent. (Higher in expensive cities though)
jakub_g 3y ago
I never saw the tax not being included in Europe. The only thing that is not shown up on the shelf is the deposit for beer & soda/water bottles that some countries have (usually around €0.10-0.20 that you get back when you return the bottle).
jandrewrogers 3y ago
In the US there are thousands of overlapping and independent sales tax authorities. Each tax authority has their own complex sales tax rules with respect to what products they apply to and the rates. Each authority can change these on an arbitrary schedule. it isn't chaos but it is very messy. As a consequence, the sales tax rules are extremely local and the combination of all separate tax authorities that have jurisdiction over a specific retail location. While it might be nice if the sales tax was built into the price, it is a continuously moving target and therefore is simpler to compute on demand rather than physically repricing things on the shelves.
- dmurray 3y ago
  > In the US there are thousands of overlapping and independent sales tax authorities. Each tax authority has their own complex sales tax rules with respect to what products they apply to and the rates. Each authority can change these on an arbitrary schedule. Still, seems like the retailer is in a better position to handle that complexity than the consumer. Surely it's better to have the retailer advertise the post-tax price (and occasionally lose money if they wrote the price tag assuming one set of taxes, and determined a different one applied at checkout) than for the customer not to know whether the $30 item they are buying is $32 or $38. It's not even that important that the customer's receipt correctly itemizes the taxes - that's nice, but it matters more that the retailer pays the right amount to the tax collector at the end of the year. Also, "thousands of overlapping sales tax authorities" overstates the complexity. A typical retail location (the level at which price tags are usually decided) deals with 0-3.
  - jandrewrogers 3y ago
    The customer's receipt absolutely does need to correctly itemize sales taxes. It is an input to the customer's own tax filings. And obviously, overstating the sales tax is illegal regardless. Any sales tax decrease will not be transferred to the customer except in a delayed fashion under your model. Furthermore, requiring the retailer to eat any downside on sales tax changes will cause average prices to increase, albeit slightly in most cases, to transfer the risk to the customer as happens in every other market where operating costs are not directly chargeable.
- justsomehnguy 3y ago
  > As a consequence, the sales tax rules are extremely local and the combination of all separate tax authorities that have jurisdiction over a specific retail location. While it might be nice if the sales tax was built into the price, it is a continuously moving target and therefore is simpler to compute on demand rather than physically repricing things on the shelves. And don't forget, the whole Europe still can't solve that for the last 40 years! Wait... They did. Now I listening for the list of excuses why this country can't do the thing the whole world did eons ago.

beachy 3y ago

This is the law in NZ at least. When selling to consumers, you must include the GST in the displayed price. If selling to businesses, you can display the price excluding GST.

devanl 3y ago

Taxes in the US are locality sensitive. The county sales tax rate varies by almost a full percentage between counties where I live, so depending on whether I ship something to my home or to the office, the amount of sales tax due is different.

missedthecue 3y ago
I think it's also worth pointing out that the US doesn't have VAT. In Europe, VAT tax averages over 21%. And this increases even further if you have locally imposed taxes. This substantially impacts purchase price. In the USA, all sales taxes on your item added together are usually just a few percent. (Higher in expensive cities though)

jakub_g 3y ago

I never saw the tax not being included in Europe. The only thing that is not shown up on the shelf is the deposit for beer & soda/water bottles that some countries have (usually around €0.10-0.20 that you get back when you return the bottle).

jandrewrogers 3y ago

In the US there are thousands of overlapping and independent sales tax authorities. Each tax authority has their own complex sales tax rules with respect to what products they apply to and the rates. Each authority can change these on an arbitrary schedule. it isn't chaos but it is very messy. As a consequence, the sales tax rules are extremely local and the combination of all separate tax authorities that have jurisdiction over a specific retail location. While it might be nice if the sales tax was built into the price, it is a continuously moving target and therefore is simpler to compute on demand rather than physically repricing things on the shelves.

dmurray 3y ago
> In the US there are thousands of overlapping and independent sales tax authorities. Each tax authority has their own complex sales tax rules with respect to what products they apply to and the rates. Each authority can change these on an arbitrary schedule. Still, seems like the retailer is in a better position to handle that complexity than the consumer. Surely it's better to have the retailer advertise the post-tax price (and occasionally lose money if they wrote the price tag assuming one set of taxes, and determined a different one applied at checkout) than for the customer not to know whether the $30 item they are buying is $32 or $38. It's not even that important that the customer's receipt correctly itemizes the taxes - that's nice, but it matters more that the retailer pays the right amount to the tax collector at the end of the year. Also, "thousands of overlapping sales tax authorities" overstates the complexity. A typical retail location (the level at which price tags are usually decided) deals with 0-3.
- jandrewrogers 3y ago
  The customer's receipt absolutely does need to correctly itemize sales taxes. It is an input to the customer's own tax filings. And obviously, overstating the sales tax is illegal regardless. Any sales tax decrease will not be transferred to the customer except in a delayed fashion under your model. Furthermore, requiring the retailer to eat any downside on sales tax changes will cause average prices to increase, albeit slightly in most cases, to transfer the risk to the customer as happens in every other market where operating costs are not directly chargeable.
justsomehnguy 3y ago
> As a consequence, the sales tax rules are extremely local and the combination of all separate tax authorities that have jurisdiction over a specific retail location. While it might be nice if the sales tax was built into the price, it is a continuously moving target and therefore is simpler to compute on demand rather than physically repricing things on the shelves. And don't forget, the whole Europe still can't solve that for the last 40 years! Wait... They did. Now I listening for the list of excuses why this country can't do the thing the whole world did eons ago.