Sales tax is horrid enough, but why the F*** do they sometimes charge sales tax on the full price when the item is discounted???
it this bull$#!+ or what???
I have not experienced this. Examples?
Coupons are one thing: the item is paid for in full, partially by you and partially by whoever backs the coupon. But you pay tax on the total; this is standard, and makes sense to me.
But if the item is actually lowered in price across the board, you should just be paying tax on the new, lower price.
I’ve never encountered different myself.
What state uses this practice of charging the sales tax based on a price that isn’t listed? That’s definitely not the case in CA. The sales tax is based on whatever price comes up in the register. In fact, I think if you have a coupon, the sales tax decreases accordingly.
Basically, all the taxable items are totaled up and then the register figures out the tax depending upon the county (it varies greatly in CA).
[ What state uses this practice of charging the sales tax based on a price that isn’t listed? That’s definitely not the case in CA. The sales tax is based on whatever price comes up in the register. In fact, I think if you have a coupon, the sales tax decreases accordingly. ]
in NY
an example, a TV is marked $50 off (lets say normal price $300)
it seeems like with an item like that the the tax should be on $250, but it rings up on $300
[Coupons are one thing: the item is paid for in full, partially by you and partially by whoever backs the coupon. But you pay tax on the total; this is standard, and makes sense to me. ]
maybe thats it, but this is still think it’s BS. who is going to back the coupon, either the store or the manuf. if it is the store then they aren’t making that much on the sale and should charge less tax, if it is the manuf, basically they are making less on that sale. that’s no reason to jack up my tax.
After working in retail during my younger years here in CA, I can only say that sales tax laws are without a doubt some of the most confusing laws ever created.
Nevertheless, I still think what NY does in regard to collecting sales taxes (at least by the way you described it) makes no sense.
It sounds like an administrative nightmare. Just how do you determine what is the “original” price?
Something seems wrong somewhere here and I would ask the propietor of the business where you had this transaction take place to explain the situation to you.
As far as I know, when an item is on sale, NY charges tax on the amount you actually pay the merchant. I can’t recall a case where anyone charged me more than the tax required for the price I actually paid.
For instance, I just bought two bottles of bubble bath for my wife at Bath and Body Works. Total regular price of the two items was $17.50. The items were on sale at two for $16 and I paid 7.5% tax on the $16 (NY tax varies by locality; it’s 7.5% here in Schenectady).
The one exception is for coupon items. In that case, the discount is considered to be made after the sale, so you pay tax on the full amount.
If someone is charging $300 worth of tax on an item you paid $250 for (assuming there isn’t a coupon involved), they are ripping you off. The Attorney General’s office or local consumer protection agency might be very interested in the details.
The reasoning behind all this is primarily practical. The Tax Department can check the store’s receipts to determine how much tax they owe. If the discount is made before the sale is rung up, they can’t check the hypothetical value (or, at least, they couldn’t when the law was set up – cash registers are more sophisticated now, but the law hasn’t been changed). If it’s a coupon, though, it’s rung up at the full price first, then the discount is applied. The tax department sees the full price as the amount to be taxed.
I believe if the coupon is from someone else then yes, you pay tax on the full amount paid, inclusing the coupon because pretty much that is what it is: the store redeems the coupon from whoever issued it.
BUT if it the coupon is issued by the store, in other words, if the store itself is giving you the discount, then you do not pay tax on the coupon because in effect what you are getting is a lower price from the store.
So, the rule is you pay tax on the amount you pay the store, whether in coupons third party coupons or cash. A coupon issued by the store is considered just a lower price.
That is the way I understand it.
I’m in Texas so this may not apply directly, but I have my own business plus have written point of sale programs that have to deal with sales tax. In general, coupons or any kind of flyers that offer a certain amount off are considered cash. Therefore, they are part of the payment and tax is charged on the amount before the coupon discount.
If a store sends a flyer that says bring this in during the month of May and it’s worth $5 toward your bill. That is a part of the payment after tax. If the store says for the month of May, all items are discounted by 5%, that is effectively lowering the price by 5% and therefore is discounted before taxes are applied.
Coupons are a little like gift certificates. You don’t pay sales tax on them when you buy them because they are used after tax is applied. So, a $5 coupon or a $5 gift certifcate or a $5 bill are all treated the same.
That’s kinda general, but without looking into specific wording, that’s about as close as I can explain it and I think it is pretty close.
Jim
ok the coupon treated as cash, explains it to a point I understand it, very very much disagree with it, but i can understand it. I can only agree with it if the coupon says actual cash value is the amount of the discount not 1/20th of a cent (which many coupons are marked).
the point that the store rings up the amount then deducts the coupon after the total, that doesn’t make sense since the reciept shows they took in less.
Sailor, glad to see no hard feelings on the wind powered screw driven watercraft - you the captain and on board I will call it a sailboat, but when I’m in my own boat and see you comming, don’t expect me to yeild right of way.
