Taxes are set at a multiple levels (federal, state, district, and city) so it's pretty much impossible to show the post tax price on the label. Hidden fees are a completely different issue.
In my eastern European country even biggest supermarkets can change all labels overnight (I even bet they can can do at least twice daily - albeit with here and there confusions when there multiple labels for same good)
It is not like these shops hop hourly between taxes...
At the Co-op supermarket in our little UK town (population 3000) they’ve even just replaced the shelf price tickets with tiny colour displays.
And this problem is harder than some might think. I knew someone who lived on a street that was a "dividing line" for this stuff: same zip code, same city, but one side had a 9% sales tax, the other side had around 7%. We tested a lot of online stores and none of them got it right. Including Amazon.
In that same way they know what price to show you.
Did you miss the part about it being calculated in the cart? That’s after you’ve made the decision to purchase, a decision which presumably included the price. I would refuse to give every vendor my address just to see a price.
How does it work now? If you don't give your address, but the price depends on your address, how does the store know how much to charge you? If you don't have to give your ID then surely you just say you're from the lowest tax location?
It only really matters where the goods are delivered.
I don’t want to give my address to see the price. After I’ve decided to buy the thing, I’m okay disclosing who I am. But simply to see the price?
Also, if I’m a retailer and people are giving me their address before I price them, on what planet am I not going to use that to help me price discriminate?
Taxes don't change every street.
Ha. Oh boy. I remember when an engineer at a POS system start-up said something similar. It's like when someone decides they're going to roll their own time zone calculation.
In case you're curious, yes, two people in the same city can be in different counties, different school districts, different water boards, et cetera. Each of those typically has taxing authority. And this is before we get into crap like urban enterprise zones [1].
[1] https://en.wikipedia.org/wiki/Category:New_Jersey_Urban_Ente...
Also, Apple Park is in Cupertino the city but not the school district.
I've seen cases where a neighborhood was split. Two near-identical houses, but one had less than half the property tax of the one next to it.
I live near a place called Westlake Village that straddles the LA County/Ventura County line. In LA County, Westlake Village is a city. In Ventura County, Westlake Village is a neighborhood within Thousand Oaks, and it has a different tax rate. But both mailing addresses use Westlake Village as the city.
Similarly, I have friends that live in Newbury Park, and that's what is on his mailing address. But Newbury Park is just a neighborhood within Thousand Oaks.
The location detectors are notoriously bad. I'm either placed in some town in Washington (multiple states from me) or somewhere else that does have different local tax than my part of my state.
It also doesn't work for online sales, where the final price can depend on the final destination of the goods or service. e.g. the taxes cannot be displayed until you've been given a street level address.
For me for example even my zip code spans 3 different cities with different tax codes, my street is literally one block from a different city in one direction, and about 5 blocks to another. \o/
They really shouldn't be advertising false claims in the first place.
>It also doesn't work for online sales, where the final price can depend on the final destination of the goods or service. e.g. the taxes cannot be displayed until you've been given a street level address.
That one has an easy solution: Just ask for the destination.
So basically what you’re suggesting is banning any ads (besides billboards etc.) from advertising any prices? How does that benefit consumers at all?
Just to be clear, you're suggesting that all pricing be removed from all advertising nationwide. This would clearly be to the detriment of the consumer.
> That one has an easy solution: Just ask for the destination.
Again, this is to the customer's detriment. They have to provide their personal information just to see the price of any item on any website they visit? And that's somehow worse than having to mentally add a percentage to any price they see until checkout? You must be kidding.
If you have a practical alternative that could somehow allow for advertising with prices that include tax, I'd love to hear it. (Just to make sure we're on the same page ahead of time: amending the Constitution to strike the Tenth Amendment so that the Federal Government can prevent states from levying their own taxes is not "practical".)
Localized advertising as you put it, with included tax info, cannot work for: TV, radio, billboards, internet advertising, and is not useful to consumers for seat advertising, bus stops, etc.
Circulars only work because they can be printed in large numbers and delivered cheaply because they are delivered to every house in a region. Except delivery regions are by zip code, not by city or municipality - my zip code has three cities in it. As I have said elsewhere I am around 10 houses from a different city, so postal delivery for circulars that includes the prices is out unless you include multiple prices, but that's still kind of busted because if I get a circular I might stop at the store in a different city along my commute.
So now if I see a "full price" from X different ads, which "full price" is correct for where I would be shopping? Hence what matters in this environment is that all advertisers are providing a complete price where the only difference is the tax.
If the tax people were paying was transparent it would help people to comparison shop where they paid lower prices. I really see it as win-win.
And even if there was a carve-out for non-location-specific advertising, at a bare minimum brick and mortar stores (and restaurants) should display the prices they actually expect you to pay.
They aren't false advertising, they say "$X + tax and fees", this law is about removing the "and fees" bs where the seller is actually charging more than the advertised price but pretending it's a nebulous fee they didn't set.
I also think you may not be understand the degree of BS. My partner and I were recently buying a new car, and not one car dealership was advertising a true price for their cars. Multiple dealers had something that they literally stated was a "market price adjustment fee", that was not given until you were in the process of purchasing the car. These "fees" were 5-10 thousand dollars on a 30k car.
> That one has an easy solution: just ask for the destination.
So you would be ok if the first step in shopping online is giving the site your street address? you're saying that you could not price compare online without first providing your address to every company you were looking at.
I'm assuming you aren't in the US, so you aren't familiar with how its governance works. Every state, county, and incorporated city can have its own sales and service taxes. It doesn't matter if you think that's a questionable setup - the US constitution guarantees that right at at least the state level, and most states have similar laws guaranteeing some amount of that power to county and city governments, so it is literally impossible to remove this structure. So this issue is how do you make this law work, given the constraints of how the US government is constructed. "Solutions" that require any kind of unification of governance are almost certainly unconstitutional (again this separation of governance is a part of the US bill of rights).
2. Online sales you won't even be able to calculate it until the customer puts in their shipping information. And no, they can't figure that out beforehand as there are a myriad of reasons why where their IP is does not mean where it's being shipped to, which is where the taxes need to be calculated.
Like, how quickly?
<1 day? otherwise it shouldnt be a problem
It sounds like your legislature spend all their time setting taxes?
If we locate the same product on the Amazon US site, it's $499.99 before tax. Amazon has two choices: show their price before tax or require shipping information from the user to see a price at all. (An estimated geolocation is not precise enough to determine a price.) For most consumers, I suspect seeing a pre-tax price upfront is better than having to provide personal information to see a price at all.
That explains online sales, but let's address brick and mortar retail. Imagine you go to Best Buy to comparison shop against Amazon and the price says $550 including tax. Is tax on this item in this location 10%? Or is it 5% but Best Buy's base price is higher than MSRP? It's up to me to find out the local tax rate and do the math. Let's say they agree to price-match Amazon; the clerk will need a function on the register to input a pre-tax price to facilitate this.
So, given this complexity and disparity, US manufacturers list MSRP without tax. Retailers display pre-tax prices for marketing and competitive reasons, generally never exceeding MSRP. Customers have come to expect this nationwide, so changing now would be challenging. (There are other good reasons to stick with pre-tax, too. In grocery stores, for example, pre-tax prices are very useful for SNAP beneficiaries.)
Do I think it would be useful to display tax calculations on signage in-store? Absolutely, and for some goods in some states, they do. But without laws or customer demand, retailers have no incentive to put themselves at a competitive disadvantage.
It’s always fascinating when Americans have problems other countries don’t have, and just throw their hands in air saying “welp nothing we can do about it”
For example: in most countries you include sales tax in your advertisement, because why wouldn't you? In the US there is no countrywide sales tax, there are some states with literally no sales tax, and then there are states with high sales tax to compensate for zero income tax (which is excitingly regressive taxation).
Then inside the states each county can have its own array of sales and service taxes, which can also vary according to the goods and services involved, and finally individual cities in those counties can also have their own.
Core to this is that the US constitution explicitly enshrines federalism in the tenth amendment (the last part of the "bill of rights"), that explicitly limits the power of the federal government.
I think this is the part that non-Americans fail to understand; we have no central tax authority and that principle is enshrined in our Constitution. Like it or not, so long as the US exists in its current form, so too does our wildly disparate tax code.
So the problem is that your rule impacts the prices everywhere that you see a price: any price you see online, in a poster, in a magazine, in a newspaper, in a mailer, on tv, or hear over the radio cannot include the correct taxes for where you pay for or receive the product/service.
The only place that can have the correct price is an in brick and mortar shop at the final point of sale, and even then some prices can be impacted by things like whether you're a retiree, disabled, veteran, etc. The lack of tax in the price is annoying but is predictable and is consistent. Failing to include the relevant taxes does not impact the relative cost of anything on the shelf. If you choose product A because it's the cheapest, it will still be cheapest once tax is applied. The problem addressed by this bill is when product A is the cheapest on the shelf, but has a secret fee that no other product has, that you don't find out about until checkout.
Legislation that said "you must include the final paid price in any price" in the US literally means "you cannot advertise a price for the product".
To be clear, if you go to an online store, then your rule means none of the listings can include any price information until you provide the final delivery address. Good luck comparing prices.
Hence the law says "your advertised/stated/sticker price must be the full price including any 'fees' and similar that are not set by a government agency".
That is it fixes the only thing that it is possible to fix: prices online including "fees" that are really just part of the price. In addition to being odious and anti-competitive I would also argue that those "fees" are attempted tax evasion to create a fake price for sales, and similar taxes.
Would I like the listed price to be the actual real price being charged? of course, the only people who disagree are also the ones abusing the "fee" BS that this law bans. But any law that attempted to do that by mandating inclusion of taxes in prices would instantly mean that advertisements in the US (I guess technically just CA in this case) would be unable to include any price information.
So is it annoying that when I see prices in advertisements I have to remember to add some % to the price? of course. Is being unable to fix that a reason we should also have to allow retailers to add completely arbitrary and fake "fees" that are a mandatory part of the price that the retailer (or whatever) has complete control over?
I would say the argument is no, we should not allow that, and that's what this law bans.
It sounds like you're saying that because we can't fix the pricing to include taxes everywhere, we shouldn't stop companies from having fake fees?
And that is bullshit. In India every manufacturer is mandated to specify MSRPs that are inclusive of all applicable taxes everywhere. The US can have the same thing too, and remove all complexity altogether so that each item will have a uniform benchmark price against which different stores and retailers can show discounts on.
And by the way, India's taxation is much, much more arbitrary and toxic than US taxation, and has a similar kind of structure with various local taxes piling up on federal taxes. Companies still make it work.
The whole point is that there is no set sales tax that is present everywhere.
I will try to make this clear, step by step.
In the US, the federal government does not, and can not, set any kind of federal sales tax, service tax, or similar.
Every state is free to set its own sales and service taxes. The states have set sales taxes from 0% to 7.25%.
In each state, each county can also set their own additional sales taxes.
In each county, each city can also set their own additional sales taxes.
So that total combined tax for any given location in the US can range from 0% (in four states) to 13.5%.
That 13.5% number? That's in Alabama where the state sales tax is only 4% and the average sales tax (state + county + city) is less than 9%. That's just one state.
The 7.25% sales is California, where total sales tax varies from 7.25% to 10.5% (the 10.5% is only in one city).
For a product in the US to include an MSRP that included all taxes it would have to include hundreds, if not thousands, of prices and the cities, counties, or zip codes that those apply to.
This is before you get to those taxes changing regularly.
When we are talking about the insane numbers of tax rates in the US here, we are talking about GST.
When we talk about cities that set their own tax rate, this isn't some population driven thing, its a specific legal entity.
To try and reinforce this, let's consider just the San Francisco Bay Area in California. In this region there are 101 municipalities, each of which can have their own additional sales tax rates, on top of the sales tax rates from nine counties. The population of these municipalities range from 1500 people to a bit over 1 million. For the bulk of these there is literally no space between the cities. Take my house, it's in Oakland, but if I walk past one house on the corner, and then about 10 houses west the houses are no longer in Oakland, they're in Emeryville, which can have it's own sales tax.
Just in my commute to/from work I drive through I think 10 different sales tax rates. This is ignoring any special sales tax rates: some but not all cities have different tax rates for soda, cigarettes, etc.
And understand this cannot be changed, any law that tried to change this would fall to the CA constitution (which limits state government control of local governments), and any thing that tried to remove this control from the states fails due to the US bill of rights (the part of the constitution that also guarantees freedom of religion, guns (sigh), etc). This restriction on the control higher level government has on lower level/state/local governments is fundamental to the construction of US government.
Thanks for your detailed reply!
Always fascinating when non Americans can't understand that different places have different rules.
The same chocolate might have a different price depending on the store I go to as well and that doesn't seem to be a problem at all.
I have literally never seen e-ink price labels in a store in the US. I'm sure they exist, but I would bet are present in fewer than 1% of stores here.
For brick-and-mortar stores, the store can quite easily calculate the final price of an item on its own. Sales taxes do change on occasion, but likely less often than the pricing of the items themselves do, so there's no added burden in having to update them due to tax changes.
Currently, consumers can generally tell if they are getting a reasonable price by comparing the MSRP they see in an ad against the price they see in store. For example, if the nationally advertised price of an Xbox is $500 and Best Buy has it for $500, I know I'm not being swindled.
But if the in-store price is $550? I guess I have to haul out my calculator and ask for the store's tax rate so I can determine whether or not Best Buy is ripping me off and I should take my business elsewhere.
Ideally, they'd show pre-tax price, tax rate, and calculated total price on every tag. Maybe, one day, we'll see action on this in a state or two, but I don't suspect it is high on the lists of any lawmakers.
Tax boundaries do not follow zip code boundaries.
To actually find the right tax rate you need the full address, including suite or apartment number because there are cases where a tax boundary runs between different suites at the same street address.
Also this is not just for online stores that ship something. It also applies if you are selling a downloadable good like a game or music, or selling memberships to your site.
Zip codes represent mail routes, so they're not actually polygons but a set of points (mailboxes), so they don't really even have boundaries.
The Census Bureau has polygons made from those points, but they're not official.