Re: HOw to say it idiomatically?

Tony Cooper <tony_cooper213@xxxxxxxxxxxxx> writes:

On Tue, 22 Aug 2006 14:39:22 -0700, Evan Kirshenbaum
<kirshenbaum@xxxxxxxxxx> wrote:


Strictly speaking, that is, I believe, illegal in the US. They are
required to collect the tax from the purchaser. What is legal is to
discount the item so that the sales tax on the discounted price is
equal to the discount. That's how it was rung up (and explained to
me) the last time I purchased something in a store during a "no
sales tax" sale.

That works out better from the store's perspective, anyway. If the
tax rate is, say, 8% and the price was $100, they'd have to pay $8
in tax under the first model, for a net of $92. If instead they
discount the item to $92.60, the tax brings it up to $100 and gives
them sixty cents more profit.

Sales tax laws vary from state to state.

Of course. I should have said that.

In Florida, it's required to charge sales tax but there's no way for
the state to enforce collecting the sales tax from the customer.

I was basing my statement on what I (perhaps incorrectly) remembered
from my father, who's an accountant in Illinois, and which seemed to
be confirmed by stores I've dealt with, who behaved as I described
above, the last of which claimed that "The state makes us do it this
way". I could well be wrong about Illinois (and I can't seem to
access their statutes at the moment), but I thought I remembered that
they were explicitly "required to collect and remit" sales tax. I'll
have to ask my dad whether that's still (or was ever) the case.

To my great surprise, when I looked at California law, I found that
retailers here are required to *pay* sales tax on their receipts.
And, indeed, the Board of Equalization frames the question this way in
their FAQ:

3. Can I collect sales tax from my customer?

Yes. Although you are required to pay and report sales taxes to
the Board, you may be reimbursed by your customer for the amount
of tax you owe on a sale. For example, if you are required to pay
$1.75 in sales tax on a sale, you may pass that cost on to your
customer, provided it is agreed to as part of the sale. It is
presumed that the customer agrees to pay the addition of the tax
if:

- You list a separate amount of sales tax reimbursement on your
receipts or invoices;

- You post a sign on your premises stating that sales tax
reimbursement will be added to all prices of taxable
merchandise, or make a similar statement on price tags,
advertising material, and other printed material directed to the
purchaser; or

- The sales agreement specifically calls for the addition of sales
tax reimbursement.

If you include sales tax reimbursement in your prices, rather than
itemizing it separately on your invoices or receipts, you must
inform the buyer that tax is included. You can post this
information at your premises in a location that is visible to
purchasers; or you can include it on a price tag or in an
advertisement (whichever is applicable). Use one of the following
statements:

- All prices of taxable items include sales tax reimbursement
computed to the nearest mill; or

- The price of this item includes sales tax reimbursement computed
to the nearest mill.

http://www.boe.ca.gov/sutax/faqpurch.htm

That provision notwithstanding, I don't think I've ever seen the "to
the nearest mill" on such a notice.

[snip]

I don't see how your example gives the store more profit. It
reduces the loss taken when the item is discounted from $100 to
$92.60 by about 60 cents over the flea market method, but the profit
is reduced.

I was going under the assumption that the profit was greater than the
discount. If the cost to the store was, say $80, the profit the first
way is $12.00, while the profit the second way is $12.60. Of course
both are less than the $20.00 the store would get if the customer had
paid the sales tax, but given that the customer is just as likely to
by under either reduced scenario (since the out-of-pocket expense is
$100.00 either way), I suspect that most stores would be happier
making 5% more profit.

It's not a matter of the store paying $8.00 or $7.40 in sales tax.
The customer pays the sales tax and the store passes it along to the
state.

In the first case the store is paying $8.00 in sales tax and receiving
no reimbursement; in the second case the store is paying $7.40 in
sales tax and being fully reimbursed, but is receiving $7.40 less in
revenue.

--
Evan Kirshenbaum +------------------------------------
HP Laboratories |English is about as pure as a
1501 Page Mill Road, 1U, MS 1141 |cribhouse whore. We don't just
Palo Alto, CA 94304 |borrow words; on occasion, English
|has pursued other languages down
kirshenbaum@xxxxxxxxxx |alleyways to beat them unconscious
(650)857-7572 |and rifle their pockets for new
|vocabulary.
http://www.kirshenbaum.net/ | --James D. Nicoll


.

Relevant Pages

  • Re: Sales Tax Algorithm
    ... invoice for the US and Canada ... I'm aware that there's a different sales %tax rate% for each US state, ... so that the total sales tax can range between 6.25% ... not allow either the State of California or the State of Massachusetts ...
    (comp.programming)
  • Re: My take on the flawed "Fair Tax" (repost)
    ... >> cares that consumption happened and the tax is collected the same time ... is not as efficient as you and has since dropped out of the market. ... >> efficient market hypothesis), supply decreases, prices rise. ... > sell for the same price plus the sales tax. ...
    (misc.taxes)
  • Re: NRST - Many Pitfalls
    ... The Pitfalls of a National Retail Sales Tax ... audited as the states and some cities will continue to have income taxes. ... Therefore, the states will just take over the tax base being given up by the federal government - the income tax - and abolish their state sales taxes, which would otherwise come on top of the NRST. ...
    (misc.taxes)
  • Re: Re: Flat tax vs. national sales tax
    ... >> Flat tax vs. national sales tax ... >> The flat tax is not the only solution that has been proposed to ... >> proposal under discussion is the national retail sales tax. ... which allows Washington to impose the income tax. ...
    (misc.taxes)
  • Re: Not charging Sales Tax if Customer has Resale Number ??
    ... customer's [Resale Number] and assign the TaxRate accordingly. ... Ideally the line items table has a TaxRate field, ... customer acquired their tax free status. ... One of the fields in each line items is sales tax. ...
    (microsoft.public.access.forms)
Loading