Understanding US sales tax/vat

[Banan911]

I’m from Europe, and in Europe the sales tax or VAT is always included in the price you see on the price tag as a consumer. That means, you’ll never pay more than the amount you see on the price tag.

However, I’m in the US several times a year, and here I still fail to understand what I need to pay and why?

I just came home from a trip to Chicago, and I bought some candy at Walgreens where I paid Sales tax A=10.25%. I also bought some snacks at Target and here I paid B= IL tax 2.25%.
Lastly I bought some rum at liquor store. Here I paid 1.6% in county tax and 10.09 in general tax?

This is extremely confusing. What’s the difference and how to figure out?

 

[jdechko]

Don't worry, it's not just you. It's all weird. The simple explanation is that different areas have different levels of tax applied and at different rates. We have no national sales tax, but will often have State, County and City sales taxes applied. Go one or two cities over and pay a different sales tax rate even within the same county.

Typically, alcohol is charged one of the highest tax rates, followed up by certain types of prepared foods. Some cities, such as New York City, famously have a high tax on sugary drinks, though only for certain sizes or larger. Groceries, at least where I live, are charged a much lower tax (again, excluding certain types of prepared foods). When I lived in Washington State, for instance, grocery items were charged no tax at all (aside from the aforementioned exclusions).

And then there are things like gasoline (petrol) that the advertised price includes all of the taxes.

 

[Banan911]

Don't worry, it's not just you. It's all weird.

So there’s no way for me to figure out the price before I pay. That’s just ****ed up. Sorry 😆

it’s still strange though that Target and Walgreens apply so different tax levels on similar items, when they’re located just next to each other.

 

[MacUser2525]

So there’s no way for me to figure out the price before I pay. That’s just ****ed up. Sorry 😆

it’s still strange though that Target and Walgreens apply so different tax levels on similar items, when they’re located just next to each other.

Yes but they are not the same items, the taxes are very specific when they do that theft from you. The only way to figure it out is to ask the merchant what are the taxes on it before purchase. Here in Canada we have no taxes on food, unless it has been prepared for you. Then only in certain circumstances, it is damn confusing for us who live with it too.

 

[jdechko]

So there’s no way for me to figure out the price before I pay. That’s just ****ed up. Sorry 😆

it’s still strange though that Target and Walgreens apply so different tax levels on similar items, when they’re located just next to each other.

No, it really is messed up. I suppose you could always ask what the tax is.

As far as buying "snacks" that has a lot to do with it too. If you're buying a bag of say, Peanut M&M's you'd get charged the higher prepared food rate. But if you were buying a bag of mixed nuts, or potato chips, you would probably pay the lower grocery rate.

Personally, I always just estimate 7% at home and 10% when I'm at work in the city.

 

[Gregg2]

I don't worry about the sales tax. I'm going to pay it if I want the thing I'm buying. If I can't afford the tax, I can't afford the item(s) I'm buying, so it's not an issue.

 

[cube]

It matters when you do comparison shopping between two jurisdictions.

 

[DeltaMac]

A few states do not offer a sales tax, such as Delaware or New Hampshire.
And, in the western U.S. - Montana, Oregon and Alaska.

 

[Gregg2]

Well, it's not an offer exactly. Some states have very high sales tax, and no income tax, such as Washington, and, I think, Florida. (maybe not, maybe others)

How many people can choose between two places for purchases where the tax would need to be included to make a like comparison? Ok, those living near a state border, but by far, most don't have the option.

 

[eyoungren]

A general rule of thumb I use is for low cost items to add $1-2 to the total I have in my head. Usually it works out in the general area. For example, if I've run up a tally of around $18 in food items I can expect my final bill to be about $20. When buying more expensive items I increase my assumption. Stuff like TVs and appliances I might guess $30-50 in tax.

Sales taxes are crazy though. There is an east/west street I live close to. If you live on the north side of that street you live in Glendale, AZ and your tax will include state, county and city for businesses in that city. If you live south of the street, you live in Phoenix (where I live) and there is no county tax. Both Glendale and Phoenix are in the same county, so go figure.

Unfortunately for us, Walmart is north of the street so Glendale gets my money and not Phoenix.

 

[ActionableMango]

So there’s no way for me to figure out the price before I pay. That’s just ****ed up. Sorry 😆

It is and you are right.

But on the other hand, if you are travelling from Europe in the USA, this is already costing thousands, so why are you spending time worrying about the amount of tax you'll have to pay on a candy bar?

What you should be concerned about is hurting your finger and getting a hospital bill for $180,000.

 

[satcomer]

I once had this with gas while I was solider in Northern Virginia! Gas was 30cents cheaper less than 3 miles from me in another county (Fairfax) and gas was really cheap there in Prince William County!