Why don't stores and restaurants include sales tax in overall price?

Question

I wonder why stores and restaurants don't include sales taxes in their prices? Instead of tacking on the 7% sales tax (in NC) why can't they just put it on advertisements, shelves, and menus? Would you prefer a store that gave you predictable prices? For example, would you go to a restaurant that had their prices in full dollar amounts, IE $5 for hamburger & fries, instead of say,4.89?

I understand that the gov't charges sales tax, but would stores have an incentive to include this in their advertised prices, for customer service reasons?

Answer 1

Because they can't. Depending on several circumstances, the sales tax may be different for many different companies and individuals, etc. They need to state the price, and then apply sales tax as appropriate.

Since you invoke NC, they have severals ways of applying sales tax for various types of businesses. Depending on what the company is and what the item is, it's exempt, 1%, 4% or full, used as incentives to attract business to the state and help its overall economy. In TX, the sales tax is different at a fast food place depending on if you're eating the the restaurant or taking it out. In most states, purchases for resale are not taxed, so it would be wholly inappropriate and even against the law to charge a tax included price to them.

It's the people who don't have the math skill to factor sales tax into their individual purchases who have a problem with it.

Answer 2

Actually I would, just because I came from a country that sales tax was even for anything you would buy and it was always included on the price. It would also make it whole lot easier to know the exact amount of money that you needed to carry.
But the idea here in US is how to create a smoking mirrors image and make the consumers believe that they are getting something cheaper than what they really are. It is all an illusion and the idea behind it is that you will accept it better and think that it is really cheaper if something costs $9.99 verses $10.00. Now try to also add that 7% on top of the $10.00 and you have a $10.70 price. Which number would you react better to and which restaurant would you actually go to to dine? Another factor is that if you had even numbers you would refrain yourself from spending anything extra. Not everybody likes to add-up the cents and then try to figure out tax so in their mind they tend to make $9.99 to $9.00 for the meal and the $1.69 maybe $1.50 and the think they have an extra $1.00 -$1.50 for dessert so they tend to spend more due to the guesstimate in their head. If someone knew the exact numbers then they would probably skip that second drink order or dessert if they wanted to spend only $15.00 to begin with.

Answer 3

Every state has their own tax rates they use and each city or county within that state, can set their own taxes.

It would be really difficult for businesses, such as franchised hamburger resturants like McDonalds, to advertize, make signs or menus with all the different prices for all the resturants in the cities-not to mention all the states. You could own 14 Mc Donald's in 5 different cities, with 5 different tax rates....you would have to have them all custom made, rather have ONE price going on all those menus or signs for the same burger, it just makes more sence to be consistant with the selling price across the board and add the tax individually.

Answer 4

It is because the states generally do not allow it that way. The ways that tax laws are written, the sales tax usually has to be separately stated on the receipt and on the menu. There are very few exceptions to that law, usually parking and gasoline.

Answer 5

Because stores do not charge you sales tax.
The government charges you sales tax.

I'm sure politicians would love to hide the amount of taxes they have you pay.

Answer 6

some do
Id perfer to have the tax prefigured