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On a recent trip to San Francisco it was always a surprise to see what to pay in stores. It was never as simple as just adding all the published prizes. There was always a surplus of taxes. Sometimes it was just an additional 50ct, but sometimes the increase in prize was substantial. The most extreme case being a bag of apples with a publised price of 1.99 but a final price of 4.50. Isn't there a single VAT and how can I know the prize to expect? If the taxes apply to everyone, why not simply publish the price including taxes?

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Tax will never double the price of an item. Most likely the apples were 1.99 per pound, and you bought a 2+ pound bag of them. Most food like apples would actually be tax free. –  Doc Oct 27 '13 at 9:14
This isn't specific to San Francisco. This is basically the way prices work everywhere in the USA. –  Fake Name Oct 27 '13 at 9:39
@FakeName And in Canada as well, where the VAT percentage is different per province –  Bernhard Oct 27 '13 at 11:19
In Canada, I think tradition/influence from the US plays a role as well. Having a price per province does not seem like a big deal and taxes could easily be included. Eurozone countries are sometimes smaller than a Canadian province, have different VAT rates and yet taxes are always included in prices. Also, some products have just one retail price in several countries, which means the retailers actually set different before-tax prices so that the apparent price is the same and “absorb” the difference. All this is perfectly doable if the law made it mandatory. –  Relaxed Oct 27 '13 at 13:24
I was amazed by this as well when visiting the USA. In Europe, the price is not printed on the product (because of course, it may be more expensive in some stores than in others), but at the shelf. In the computer age, there is no reason whatsoever why each store can't label the actual customer prices on the shelf. They don't do it because it's legal not to do it. –  gerrit Oct 27 '13 at 20:03

3 Answers 3

up vote 13 down vote accepted

There is no general VAT in the US but various sales taxes, which means that there isn't a single tax rate that shops could easily include in all prices. Depending on the location, there could be a sales tax from the state, county, city or even other institutions (transport authorities, etc.) so you cannot even set a price and print labels for a state or a metropolitan area, let alone nationwide.

Also, displaying lower prices is generally advantageous so as long as they don't have to do it, it would seem retailers have very little incentive to figure a way to deal with all this. Even if one would consider doing it (which is not the case as far as I know), they would just make themselves look bad compared to the competition. To use an analogy, even when several parties really wish to reduce their weapon stockpiles, it's too risky for one of them to disarm unilaterally and find itself alone without weapons when the others still have them (or in this case, display higher after-tax prices when everybody else advertises with before-tax prices).

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Ah, comparing apples and guns :) –  Bernhard Oct 27 '13 at 11:21
Great answer, if you could add info on how to calculate the tax to be expected for SF I Will except this answer. –  andra Oct 27 '13 at 11:30
San Francisco sales tax is 8.75%; but the rate varies from one town to the next (ex nearby Berkley and San Mateo are 9.0 and 9.25% respectively). Some items, including Unprepared food, bakery items, and hot beverages, are exempt from sales tax. boe.ca.gov/cgi-bin/rates.cgi?LETTER=S&LIST=CITY –  Dan Neely Oct 27 '13 at 13:12
so you cannot even set a price and print labels for a state or a metropolitan area, let alone nationwide Don't they have computers? Surely it would be easy to display different prices in different stores? If it's known at checkout, it should be known at the shelves of the store or — at least — using some kind of in-store portable scanner. I rather think the reason is your second point: if retailers can advertise a price lower than the real one, they'll do so. Plenty of products in i.e. Sweden cost more in one store than in another, simply because the other store is more remote. –  gerrit Oct 27 '13 at 19:59
Aren't taxes always to high, no matter the percentage ;) –  andra Oct 28 '13 at 1:35

I would say that because the law is not on the consumer side in the USA and therefore does not require the total price to be displayed.

Most shops will therefore leave off taxes etc as you are then more likely to buy an item. (Trustworthily companies loose trade due to other companies misleading consumers on prices, so therefore quickly all the companies become as bad as each other.)

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First of all, there's hardly anywhere in the United States with a sales tax over 10% much less a rate of over 50%; you either misunderstood the price of your apples or were overcharged.

Retail sales tax in the US and Canada is inherently different than VAT (value added tax) charged many other places, sales tax is charged based on what the retail sale of a product vs. VAT accumulating through each stage of the production process.

While now easily surmountable, before computerization various local (city and county) sales taxes across the country posed a burden to retailers who operate in multiple places to calculate prices. Another reason for tax being is giving transparency as to how much tax governments are collecting.

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VAT and before tax prices are mentioned on receipts everywhere in the EU. I am also not sure I understand what you mean with “accumulating through each stage of the production process” or how this would have any impact on prices posted in shops. –  Relaxed Oct 3 '14 at 22:46
The VAT-break-down is listed on receipts many places, but customers don't always get receipts. –  Carl Oct 3 '14 at 23:07

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