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Are you hooked when you hear an ad say that if you buy something doing a limited time the retailer or business will pay the sales tax?  You want to know the secret of who pays the sales tax.  You pay the sales tax.  States that have sales tax don’t allow businesses to sell an item without collecting sales tax if that item is subject to sales tax.  Some states don’t allow this type of ad. The sales tax is included in the purchase price. The retailer or business just backs into the sales price to report to the state.

For example:

Item Costs 1,000

Sales Tax: 6%

In this example, the sales price is $943.40 and the sales tax is $56.60.  The business reports the sale to the State as $943.40 and the remits sales tax in the amount of $56.60.  A gimmick –sure.  People like gimmicks when it comes to advertising.  3 for a $1.00 will sell more than a price of .33 each.  So the next time you hear a retailer run an ad that they will pay the sales tax if you purchase an item from them, remember that you are getting a discounted price on the item in addition to paying the sales tax.

Do you like these types of promotions?

 

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