Question about over the counter sales tax

[cooleddie74]

Here's how a similar beverage purchase would work here in Virginia. No coupons involved whatsoever.

Two $2.19 sodas that are on sale for $2.00 each.

Now, food items are taxed at just 2.5% in Virginia, half the rate of non-food products. You take your two bottles of soda to the checkout lane. The cashier scans them. The sodas technically still ring up in the system for the full $2.19 apiece, totalling $4.38. Then the tax is calculated and added, which amounts to 11 cents total. That brings the transaction so far to $4.49. Then the system gives you the in-store sale discount of 19 cents for each bottle, removing 38 cents from the total.

Your final total for your soda purchase here in the state of Virginia is $4.11.

You might not like that the store charges the full sales tax on the pre-sale price. You might not agree with it. But it's just how the system works. Like I said, the store isn't going to eat the difference. It's still required by law to collect 2.5 cents on every dollar worth of prepackaged, grocery food items in the state of Virginia whether the store itself is giving you a discount on their merchandise or not. The state law doesn't change just because the retailer feels a little generous and cuts the prices of some of its merchandise to help boost traffic and business at its location.

I really don't see anything you nor anyone else can do about it, short of, as I said earlier in the thread, electing politicians who'll cut those taxes or change how they're calculated and imposed on the shopping public.

 

[Yoda]

Well, I don't have to do anything about it, because that isn't how it works in California:

You may issue retailer coupons in paper or paperless form. When presented to you by your customers, these coupons allow your customers to buy products at a certain amount or percentage off
the regular selling price. Retailer coupons do not result in compensation from a third party and are
excluded from your total taxable sales unless your customer has previously given you compensation
for the coupon. For example, the coupon was purchased as part of a coupon booklet sold by you to
your customer, the pro rata share of the cost of the booklet represented by the purchase for which the
coupon was given must be included in your total taxable sales.

Source

It seems highly illogical to do anything different.

Of course in the end I still lose because CA sales tax rate is absolutely brutal

 

[RoJoHen]

Sales taxes are silly and random and vary from state-to-state.

I once had a 30-minute argument with a dude at my restaurant because he didn't understand the tax he was paying on his bill. It took us forever to realize that a) food and alcohol are taxed differently and b) sales tax differs between Illinois and Iowa. This guy was determined to not pay the tax and had everybody at his table trying to calculate what the price should have been. He was convinced that we altered his check to include extra sales tax so we could make more money. Complete nonsense.

 

[Scout101]

The infuriating one is cell phones. Buy a new iphone near me, see how it works out. You get charged tax not on the advertised price that everyone in the world pays (say, $299), but on the "real" non-subsidized price that no one's ever paid, or at least not since the first iphone. Paying tax on like $700 when an item cost $300 is pretty messed up. Ends up being another $30 or so that you can't quite figure out why you owe...

 

[eastman23]

So uhh... was my math wrong? Because it seems to me like he's complaining about extra tax that he didn't even pay.

Also, a 'store' coupon and a 'manufacturer' coupon are not the same thing. That is a 'store' coupon is essentially just a reduction in price whereas 'manufacturer' coupon subsidizes a purchase. Maybe it's different state by state, but it makes no sense for the former to be taxed at the non-discount price.

Looks right to me. The 0.42 in taxes is (roughly due to rounding) equal to 6% of the discounted total of 7.09. If that's what the tax rate is where he lives.

 

[Balrog]

My complaint is that taxes are requirements on percetnages of the amount paid by the customer regardless of what that amount is.

Actually, taxes typically are based on the value of the item purchased. Try buying a car out of state where there is no sales tax and registering it your home state that does. The state doesn't give a lick what you paid. It charges you on the value of that car.

I'm not disagreeing with you. Taxes get you coming and going sometimes. That's the way it goes. You could always become a Republican or Libertarian.

 

[Trekker4747]

In my experience you pay taxes pre-discounts. It's sure to vary depending on the state or city you're in, but that's how I've always seen it. You know when you get those pop bottle caps that give you a free bottle of pop? Well you still pay the tax on that free bottle of pop. You pay taxes on the worth of the item not what you actually pay.

 

[cooleddie74]

I've always paid the tax on a free food item I've won, at least as far back as I can remember. If I win a free 99-cent bottle of diet soda from a drink cap I still have to fork over two or three cents to cover the tax on it.

Like a wise man once said, nothing's really completely free in this world.

 

[Trekker4747]

Like a wise man once said, nothing's really completely free in this world.

Except Herpes.

 

[B.J.]

I've always paid the tax on a free food item I've won, at least as far back as I can remember. If I win a free 99-cent bottle of diet soda from a drink cap I still have to fork over two or three cents to cover the tax on it.

Like a wise man once said, nothing's really completely free in this world.

Just reminded me of a similar situation: All those game show contestants (and Oprah guests) who won free cars? They also have to pay the tax on those cars. Which is why many of them have to give them up since they can't afford the several thousand in taxes.

 

[Yoda]

In my experience you pay taxes pre-discounts. It's sure to vary depending on the state or city you're in, but that's how I've always seen it. You know when you get those pop bottle caps that give you a free bottle of pop? Well you still pay the tax on that free bottle of pop. You pay taxes on the worth of the item not what you actually pay.

I forget, do you live in Kansas? Because they have the same distinction between store discounts and manufacturer discounts as California, and what's described by the OP is definitely the former.

I've always paid the tax on a free food item I've won, at least as far back as I can remember. If I win a free 99-cent bottle of diet soda from a drink cap I still have to fork over two or three cents to cover the tax on it.

Like a wise man once said, nothing's really completely free in this world.

I've never been charged tax on a bottle cap freebie. I'm not saying that particular tax doesn't exist, just that for all I know they just take it from the share-a-penny or kindly eat the extra tax themselves.

 

[nightwind1]

The sales tax on non-food items in the state of Virginia is currently 5%. I buy, say, a bottle of ibuprofen for $3.99 and when I get to the cash register I give them a manufacturer's coupon for a dollar off the bottle of ibuprofen.

I'm still charged twenty cents sales tax on the ibuprofen whether I fork over the coupon or not, bringing the total of my purchase before the coupon's barcode is scanned to $4.19. Then the coupon is scanned, a dollar comes off, and my grand total for my purchase is $3.19.

In fact, most coupons specifically state "Customer Is Responsible For Sales Tax" or some such wording.

So even if you had a coupon for a free item, you would pay the tax on what that item is worth.

Same difference here, even without a coupon

 

[Trekker4747]

I've never been charged tax on a bottle cap freebie. I'm not saying that particular tax doesn't exist, just that for all I know they just take it from the share-a-penny or kindly eat the extra tax themselves.

[Yes I live in Kansas]

As for not paying taxes on a freebie bottle of pop, sometimes that might depend on the person ringing you up, how well they've been trained or how they do it. Checkers at my store have been known to see the bottle cap and to just wave the customer through without doing any transaction, taking the bottle cap and tossing it out. Obviously this isn't the way to do it and it screws a LOT of things up. Not the least of which being the counts in the computer, inventory, and the store being compensated for the use of the freebie bottle cap.

They're supposed to ring up the pop, enter the code for the freebie bottle cap, which deducts the cost of the pop, and presents a total which amounts to just the tax on the pop. Here, somewhere around 10 cents.

 

[Holdfast]

The state to state variations in the US in this thread are interesting.

VAT in the UK works invisibly (prices on shelves automatically include the VAT, though there can be a line on your purchase receipt indicating how much VAT you've paid; that's not compulsory I think, but you can always ask for it anyway). How discounts and VAT work depend on the nature of the discount. If it's a discount for a deal (eg £1 off if you buy 2 of something), the tax is calculated based on the actual sale price, not the pre-deal price. But if you have a coupon, it's applied to the post-tax cost, because the coupon is money off the total price of the object. This seems pretty fair to me, but then, I have been brought up within this system.

 

[OmahaStar]

In Iowa/Nebraska, coupons are always pre-tax, and the tax is based on the final, discounted total. If something is $1.50, and you use a 50 cent coupon, you are taxed on one dollar, not $1.50.

Well, except Omaha, which has a mayor who has written an illegal law that forces restaurants to collect a food tax - they are literally taxing taxes. But that's another story.

 

[cooleddie74]

My town has three taxes along these lines.

Virginia state sales tax(non-food items): 5%
Virginia state sales tax(grocery foods): 2.5%
City meals tax(prepared food and beverage, applicable to all restaurants within municipal boundaries): 5%

Funny thing, though...when you dine at a restaurant or simply pull through the local drive-thru to grab a bag of burgers and fries you're taxed a full 10%. Both the non-food sales tax as well as the city meals tax are combined. The authorities found some loophole where it can classify a food purchase outside a retail store or supermarket as a non-food purchase in order to collect the maximum sales tax and accrue more revenue. So when you dine out here you're charged a grand total of 10% on the cost of your meal (and that's before you decide whether or not to throw in a tip).

A whole lot of other places have much higher local and state taxes so I try never to complain much. After all, here in Virginia a guy can walk into a grocery store, buy a hundred dollars worth of food and pay just a couple of measly bucks in taxes. Most places in America can't say that.

 

[chardman]

I'm not paying $2.19 for a can.

Actually, you kinda arte

How Coupons Work, in the legal sense (at least, how it was explained to me when I worked in retail):

Let's say...
A product retails for 70 cents.
You have a 20 cent off coupon.
What is your purchase price?
It's still 70 cents.

You may only be required to pay only 50 cents of that in cash, but you still pay the remaining balance of the full purchase price with your 20 cent coupon.

The retail is still 70 cents, and that's what you pay taxes on.

It sounds like what you are dealing with here is a "virtual" coupon, where you get to use a coupon, without actually having to produce a physical coupon at the time of purchase. The coupon is nevertheless assumed to exist, if only in a legal sense.

Read the fine print on just about any coupon that's accepted nationally, and you'll see that even "free" coupons state something along the lines of "the consumer must pay any and all taxes, based on the usual retail price of the product".

 

[boobatuba]

In Iowa/Nebraska, coupons are always pre-tax, and the tax is based on the final, discounted total. If something is $1.50, and you use a 50 cent coupon, you are taxed on one dollar, not $1.50.

Well, except Omaha, which has a mayor who has written an illegal law that forces restaurants to collect a food tax - they are literally taxing taxes. But that's another story.

Same thing in Oklahoma. Coupons are applied pre-tax.

 

[Joker]

as a writer I'm...

 

[Flying Spaghetti Monster]

as a writer I'm...

What?

I am a writer. I don't put all that much time into my posts on internet boards, but I do lurk.

considering that you haven't read any of my stuff is telling