The whole argument of "it's cause there's so much variation in tax amount" never really made sense to me as an excuse. Like.. you'd print the labels at the store wouldn't you? So you just put the tax amount in the system for that store and print it.. the only way it makes sense is if for some reason you're shipping price tags across the country
this post was submitted on 27 Jul 2025
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Its so they can advertise a lower price.
There are often nation-wide or region-wide advertising campaigns that proudly display a price. If individual cities have different sales taxes, that would make it hard. Personally, I still don't find this to be a good reason. Just charge a single amount anyway and eat the costs in the high tax area. Price it in.
Edit: now that I'm thinking about it, many chain businesses are franchised. So each McDonald's (for example) is independently owned. So they couldn't just eat the cost in those areas.
Sales tax varies city by city, which means a business cannot have a central distribution center where price tagging occurs, nor could they move inventory (something that happens in retail quite often) - substantially shifting the burden onto businesses. For better or worse, I'm sure that's how the price tagging discussion went...
All of that is nonsense.
I worked for 2 corporate retail chains that would send the stores the price labels for sales and we would print out a file for other tags.
In a quarter, most labels would be replaced and they would send irregular price changes every week. We would spend probably 10 man-hours a week taking down and putting up labels under typical operations.
Items don't generally move far or often, except for rotating display spaces at the ends of aisles for promotional items where every tag changes. Every few years they might make radical changes to item placements, but they tend not to because it confuses customers.
There is no reason to exclude the tax in the price labels except for tradition and/or concealing how much you will actually pay with the tax added. Most people know what the taxes are in the area they shop and will just round up to the next dollar or add 10% if they are on a budget.
Bring on wireless electronic price tags that show the price including tax.
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Meanwhile, electronic price tags have been introduced in the market.
It's these small e-ink devices that are tethered to a central input station in the backroom, where a person inputs prices.
I've seen tags change in front of my eyes, updating price, adding promotional info or changing the product available on shelf.
Inventory movements are not an excuse, I'd say. Regardless the end sale price, if a product is not sold, it is just inventory, which value is fixed for the company.
Lidl moves tons of non perishable inventory from central wharehouses to stores, daily, and they could not care what the end price was at the store. A given item may cost an X amount in a given season, disappear for a couple of months, then return to the shelves with a different price. The inventory value does not oscilate.
I've seen tags change in front of my eyes,
I don't understand how that's better in any way? If customers should know how much an item costs, the cost shouldn't change during store hours at all.
In the US, we're using those tags to implement surge pricing. Even if we included tax on the tag, you still don't know how much it costs until you check out, because these tags let companies change the price at will.
I've seen a tag change price but that price would only take effect the next day, as the store would be having a promotion on peaches. I simply asked for a clarification and the tag was rolled back.
On the day price changes are only done to clear perishables that otherwise will end in the trash, like fresh pastries or bread. And such changes can only take effect near to the closing hours of the store. Price variations throughout the day is a crime and stores have been heavily fined for it.
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I've not worked in retail in over 2 decades, we printed all the price labels at the store back then and we have a universal VAT rate across the country meaning they could have done it centrally. I don't think the UK is over 30 years more technologically advanced than the US making that impossible.
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The average American does not include taxes in prices. This is also true in Canada.
That is so bizarre.
It's inconvenient for sure. Sales tax varies so much accross North America that I guess it's easier for them to advertise that way vs. custom signs for each province/state.
I would fully accept a law that allowed companies to advertise nationally the pre-tax price with a small disclaimer saying applicable taxes vary by location, and then require the in store price tags to reflect all taxes.
There's no excuse not to anymore. Yes it does vary, and a computer can easily adjust the price.
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Many of us are in the habit of mentally calculating it wherever we live though.
For example, my state sales tax is 6.88%, my county has a .25% tax on top of that, and then there’s a metro area tax of 1% on top of that, my city does not impose a separate tax of their own, so total sales tax in my city is 8.13%.
When shopping we’ll do the mental math (roughly) and factor that in so it might say $39.99 + tax but I know that it’ll be a little under $44 with tax.
It’s inconvenient but, like most things, we get used to it and adapt. Also, while tax varies a lot by state, most of us don’t venture too far out of our home area so tax is roughly the same all the places we regularly go.
It would be nice to have the price listed as the price you pay but it doesn’t work as well with our current system.
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I generally assume what I'm buying will cost 10% to 20% more from taxes and/or tips getting added at checkout. I agree it doesnt make sense and seems underhanded, they could post the actual prices if they wanted to.
As someone not used to it, I find it very annoying. Where I live the final sale price/cost to consumers is what must be advertised, by law. I remember car dealers attempted to omit delivery cost, a good while back, but that shit was shut down quick.
We just think about the base price, but the taxes. Then at checkout you're told "oh, that number you had in your head? Add 5-20% more as a surprise"
It's a terrible system, very anti consumer. You never get used to it
Oh, and it also has the fun side effect of making sure nothing ends on a dollar amount
When you say "people" you're really talking about the stores, right? The stores just put the price they charge, not the taxes which they don't get. Yes, taxes vary from state to state, but it's not like we're all going to different states every day. I know what the tax rate is in my area, and so I know to add that when I see a price in a store.
If you really mean "people" as in customers, it depends. If I'm telling someone that a store has a good price, I'll just quote the store's price. But sometimes when I'm talking about what I paid, I'll include everything "Wow, I can't believe this cart of groceries was $150..."
It would require zero effort for the stores to post the actual prices. This is just another example of Capitalism Stockholm Syndrome that's displayed by so many Americans. This practice is dishonest and serves no other purpose but to deceive the consumer.
It's certainly for the store's benefit, not the consumer's, but you're over stating things. Sure, there's no incentive for the store too post anything other than the price they charge, and not the state and federal charges the government layers on top of that. There's no law requiring them to do so, and obviously they'd rather post the smaller price. We could change that by making it a law, but no one really seems to care that much - just doesn't seem like that big of a deal.
Counterpoint to this is gas stations and the fact that they include taxes in the price on the giant sign by the road. Why should retail be any different?
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No one is deceived. We all know there are taxes.
Why do consumers accept a system like this? Wouldn’t it be just better for consumers if the shop pricetag represented the exact amount you have to pay at the counter?
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As someone who lives in one of the states without sales tax, i used to hate it because nothing would ever be exact change, id see a candy bar listed for $1 but actually ifa 1.05 or aomething and now Ive gotta deal with a bunch of coins. Arizona iced tea for 99c... Nah bro you still need aother 12 cents (gotta pay the bottle deposit too)
Its not as annoying now that i pay for most stuff with a card, but in still resent all the other states that force people to do math.
Whether or not I factor in tax is entirely dependent on the size of the purchase I'm making. For the vast majority of purchases I make on a daily basis, I don't think about it at all. 7% of $2.99 is negligible to me. However, if I'm making a large purchase, or if it's a purchase which I know is subject to additional taxes beyond the sales tax, then I might consider it. 7% of $2.99 may be negligible, but 7% of $29,999 is a significant amount all by its lonesome.
For most people, I'd imagine this is most common when it comes to purchasing vehicles, as those tend to carry large prices and special taxes which results in a significant increase in price. For example, I purchased a new vehicle a couple years ago for MSRP, but wound up paying several thousand dollars more than that due to various taxes and the registration fees. I didn't know exactly how much those surcharges would be (though I easily could have calculated them by visiting my state's Department of Motor Vehicles website and plugging a figure or two into their calculator) but I had a ball park idea which I could budget around. Also, I'm pretty sure the dealership I bought from provided an estimated total purchase price which included the fees for the locality it was located in. Unfortunately, most of that was irrelevant to me, as I had traveled from another state to purchase this vehicle, which illustrates the minor frustrations that an all-inclusive price tag would introduce in America.
Like, I don't think you're wrong for thinking it's odd, and yes, there are ways to fix it, but it's just such a non-issue (not to mention America's "touchy" relationship with taxation meaning these attempts to "fix" things would rapidly become politicized) that no one cares to do anything about it. As someone else said, we intuitively learn what the rough tax rate will be for our common purchases and just factor that in.
I did "tax included" when I sold stuff but it's unusual. Yes we know there is tax, I know the tax rate here and it's not difficult to calculate the total. Food, like groceries, is not taxable here.
I will say though - my husband wants a car and I keep having to remind him to gross up the price when he sends examples because on big things it is a big charge.
Usually people talk about the pre tax cost.
I have a tinfoil hat theory that the taxes are kept like that to give people a recurring, low grade, anti-tax sentiment. There are a lot of crazy idiots that don't want government to exist here, so by making people feel bad about paying taxes (instead of obscuring that by baking it into the listed price) they can win sympathy.
Take the hat off. Weirder theories exist.
I think in pretax numbers and just expect the final price to be higher - how much higher I have no idea because not everything is taxed. It was a major pain in the ass when I only had cash cus I never knew how much to take with me. Now I only use credit cards so it’s much better.
I think that builds into the credit card trap.
You should not need to guess-timate how much you're going to spend, that is the issue.
If you want to pay in cash, that's it. Pick up the items, add it in your head, that's it. Witholding how much you are really going to spend by not applying all charges holds you hostage.
Yes, you can just put it to your card and pay it later but why?
It may help, but credit cards aren't the reason.
Sales tax is something that can be charged at all levels of government, including individual cities in some states. It is easier to advertise one pre-tax price than deal with the variance of advertising post-tax prices.
And I keep thinking my country's tax system is weird.
No way! That is ridiculous. That is essentially equating to create tax havens inside your own country. What is stopping people from high taxation states to just go for a shopping spree on a non-taxation one? Or even a city or town? Nothing. It makes no sense.
My country has a mainland and two autonomous regions. All taxation is designed centrally. VAT, special taxes, income, private and corporate, vehicles, land, house, etc, everything is established centrally. The autonomous regions do have the freedom to fine tune the end % of tax but really nothing else. They can't exempt a tax, just because.
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people usually just say the pre tax price and everyone already knows the sales tax. Sometimes people say the total, but that’s usually for smaller items. For example:
A sandwich from a deli costs like $11 total and that’s what they’d say.
A video game costs 59.99 and people would say it’s $60, but everyone knows it’ll really be like $66.
We did a trip to the US that covered coast to coast by plane and then 5000k of driving back to the centre... And their pretend pricing sucked.
Every state we went to advertised a price, but what you actually paid varied by heaps.
Bought some clothes that were something like $700USD by the tag, and had $1000USD on hand... Which wasn't enough once they rang it up! Wtf?
That’s just called being scammed. There’s no 43% sales tax anywhere in the US.
Taxes aren't on the price tag, but I figure them in as I am buying stuff. Tip too if it is at a restaurant or other tip-able service.
Edit: it does provide some transparency into where your money is going (are taxes high or is the store gauging you).
Tip is of no concern here. It's a gratuity that may be given, outside the check, to the server.
The tax rates have to be declared on the product label. VAT is 23%, 13% or 6%, depending on the nature of the product. Basic food items and basic necessities, like baby diapers, are 6%. 13% is usually reserved fro restaurants and everything else goes into the higher rate.
Fuels, tobacco and so called luxury items have other taxes added to it, which are declared in the receipt.
It isn't an opaque practice.
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We don't include the tax. You just expect what you pay at the till to be some percent more than the sum of shelf prices. It's a known number, 5% where I live except on a few untaxed items (which I should mention isn't the US, just nearby).
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I've seen people discussing a cellphone offer that's like "$800 but you get $800 of bill credits over 24 months" and they would say it's a free phone. But you'd pay $800 plus tax up front and you'd not get that tax back.
Still a good deal, but it showed how many people were blind to the tax.
An extra six percent isn’t really the difference between a big purchase and a small one, so it’s pretty much just background noise for me. I know to leave some wiggle room if my budget is tight but don’t make the effort to calculate my technical maximum. Worst case scenario I get one less item than I planned.
A lot of convenience stores around me don't even have any prices shown on many items. Drives me crazy, but I guess many people are used to it? Sales tax is usually around 7% in most places I've been to, so if I know the price of an item, I know, roughly, what to expect.
No price means I won't buy. Because it means probably 200% mark up at least
Ignore it.
Sometimes I am like egh, that’s annoying and more than I expected and then carry on with buying whatever it is. But that is a more recent thing, now that am being more frugal. For like a decade I would say I never acknowledged it or thought about it.
As far as I can tell, once the question about price is asked, they will make a remark about how awful the Republicans or Democrats are (depending on their leanings).
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