Americans have this odd thing of quoting prices without tax which tends to be illegal elesewhere. OK the US does not have a sales type tax on digital goods,
It’s even worse than that, which I learned unfortunately at a former employer. Two identically priced dresses could have different tax rates based on the formality of one vs the other, ie one being a simple LBD and the other being a sequined evening gown.
I’ll have to ask someone as I’ve forgotten the specific jurisdiction, but yes, it was sales tax specifically. If memory serves, it was either a county or municipality sales tax I thought in one of the states of the United States, but I’ll see if I can confirm.
Edit:
Here’s one source:
https://www.avalara.com/blog/en/north-america/2020/02/how-to...
In that case, it’s statewide it seems for Pennsylvania. Clothing in general isn’t taxed, but formalwear is.
I know there are a lot more odd variations than just that.
If taxes are included in price, the consumer can just look at the price and compare rather than jumping through the additional mental hoop to determine if one item is subject to sales tax, and what its price is in tgat case.
On the other hand, if the taxes are not included in prices then you will see which one has taxes at checkout and elect not to purchase the item with taxes, preferring the item without taxes.
Furthermore, with taxes included in prices you are more susceptible to unscrupulous vendors charging taxes that should not be applied and pocketing the extra margins. One example of that is with the manufacturer of Niche coffee grinders charging VAT to international customers and pocketing the extra margin.
In Europe the tax is listed separately on the bill by law, no need to visit any website.
The amount of tax charged isn't hidden in Europe, it's just that the most prominent number is the total sum. The pre-tax part and all the taxes are also available separately for your information.
Why would you care? Having taxes included in sticker prices doesn’t change how much it costs you, only what percentage goes to your government. The only situation where not including taxes is potentially useful is when you explicitly don’t want to pay taxes, but you’re still happy to pay a higher price, if it means less money to the government.
Also in Europe we have a very simple solution to this problem. Every price tag has two numbers. The number in big font includes taxes, the little number underneath is without taxes. If you’re desperate to avoid giving cash to the government, then you just need to find items with the smallest delta between the two numbers. Retailers are also obliged to display both numbers, and provide a tax breakdown on your receipt, so you penny pinch your taxes to your hearts content.
Here’s an example: a base model iPhone 14 is $799. If I go to the Downtown San Francisco Apple Store, it is $868.12; if I go across a bridge to the Berkeley Apple Store it is $880.90; if I go from there across a different bridge to Corte Madera it is $870.91; if I go back through San Francisco down to the neighboring county to the Hillsdale Apple Store it is $875.90; and if I buy it in Cupertino, then it is $871.91. If I cross the State border with Oregon and go to an Apple Store in Tigard or Portland, then it is $799.
Which is the price Apple should be showing on the Apple Store? They tell you at checkout because what you pay at the end is calculated according to your shipping address, and it’s a line item: sales tax, but pricing is also marketing. Which price should Apple be quoting their American customers in national ad campaigns?
In the case of Apple they sometimes do this and other times not. So for example the iPhone 14 is 999€ in both Germany and Austria, even though they have 19% vs 20% VAT rates. However in Finland which has a 24% rate the iPhone 14 is 1039€.
Almost every example I gave was within one State: California, except for the two I tacked on at the end from California’s nearest northern neighbor in Oregon. All of the California examples were within the same metro area (the San Francisco Bay Area) but different counties. There is one US website, and one US App Store.
It is not the same situation, only seemingly superficially similar until further inspection.
Cui bono?
Personally, I like that US citizens are constantly reminded how much flesh the State is extracting.
Even within a state, sales taxes can vary at the county and municipality level.
To tell an American the full price plus tax they will pay for something, you need to know where they live. For expensive items like computers and phones, the price could vary by tens or hundreds of dollars.
I am American, and I don't pay sales tax.
I had a similar conversation with someone on Twitter complaining that the latest iPhone was much more expensive in EU, but once you factored in VAT and some import costs and the fact that apple.com shows the $ price without any sales tax there wasn't actually such a great disparity.