Tax question.. your preference

[sbug_adam]

When quoting for a client do you include tax in your prices or is tax extra?

[ronocnikral]

as everything in america, tax is additional to the prices we quote.

how's everything going man?

[sbug_adam]

oh.. HEY! MAN whats up.. LOL.. its going well, just hanging in there.

[photonewb]

blah blah blah...+tax

[dracula02]

all prices are subject to 8.25% state sales tax

[janetg]

mine are included

[S-Man]

Originally Posted by ronocnikral

as everything in america, tax is additional to the prices we quote.

how's everything going man?

I know this is how it is, But i wonder WHY that is?

Maybe it go's back to the psychological strategy of $99.99 prices instead of $100.
That said, my lists have a footnote that all prices are subject to TX state sales tax.

[ggeen]

Originally Posted by dracula02

all prices are subject to 8.25% state sales tax

STATE sales tax is 6.5%, then you add on local municipality taxes. Not everyone in Texas pays 8.25% sales tax. Some is more some is less. Check with the comptrollers office for your area specifics.

When I ran a computer repair business, everything was price + tax.

[S-Man]

Oh yeah! I remember them telling me that when I got my DBA...They have a little chart of places where it's 8.25 and 6.5. I'm in 8.25 territory.

[ronocnikral]

still, the question remains, why make your self seem more expensive? Americans are used to paying tax in addition to what they see and fewer people ask what the "out the door" price will be compared to those that do.

[bryanlindsey]

Yeah, it still sucks at the end when they say, "Ok, so the balance is $1000, right?" and you have to say "aaaaactually, it's $1082.50..."

[ronocnikral]

it may suck for them, but it sucks more for you to pay it out of your profit.

and if you say it as I believe the 5 "a's" in your response dictates, you will get hammered. a firm "$1000+tax" statement will come across much better and "suck" much less for everyone involved. Americans expect it (can't say that enough). we avoid stating the rate or what the tax will be if we can help it.

[brad]

IANAL and YMMV ... but for those "including" tax.. be careful how you say it.

It's "Tax is included in that price" not "We'll cover the tax."

If you use the former language, then you owe tax based on (final price) / (sales tax). If you use the latter language, the state can say you owe tax on the price you charged the client.

For example.. if you say $1000 includes tax (and your tax rate is 8.25%), then you have to report the sale to the state as being $923.79 (and you collected $76.21 in sales tax). If you say the price is $1000 and you'll cover the tax, then you have to report to the state that the sale was $1000 and you are liable for $82.50 in tax on that sale.

I have a friend who's company got slammed on this during a sales tax audit (not her problem because she isn't the owner of the company.. she just does the books).

Again.. IANAL, IANACPA, and YMMV... but personally, its safest to say "My price is $1000 plus tax."


As far as how to say it.. when its being written up at the end, I tell them something like "And with tax, the total comes to $xxxx. The King's gotta take his share, you know." Make it a joke... I put it in a way that implies I don't really have control over that part.. because I don't. At least not any more control over it than my client does... through voting.

[S-Man]

On a side note, the acronym, if you will, IANAL always makes me chuckle

[ronocnikral]

Originally Posted by S-Man

On a side note, the acronym, if you will, IANAL always makes me chuckle

kind of like tobias' job title when he was an analyst and a therapist.

brad does bring up a good point. if you were to "include" tax, I would spell it out on the invoice at the lower price for services, clearly state what the tax is and a total of whatever amount is desired ($1000 has been popular today). i never really thought about that, but then again, my thoughts of having tax inclusive prices have been brief.

other good point of brad's, easiest and best to just have your price+tax.