Would this piss you off if a bar....

[AustinChief]

Would it piss you off if a bar charged 8.25% sales tax (normal in Texas) on credit card tabs but ate the sales tax themselves on cash purchases?

To clarify a bit... CURRENTLY all bars here eat the tax on ALL purchases... it has to be built into the price. They aren't allowed to break it out but that all changes January 1st.
Of course it would be a complete pain to add sales tax to cash purchases but a no brainer for cc purchases.

But let's assume consumers are completely ignorant of any changes in tax code. They only see that now their credit card tabs have sales tax added. I understand a certain amount of people will be pissy but how bad would you rate the backlash?

[TribalElder]

Most people using cards probably wouldn't notice. Especially if they run up a large tab.

Cash is king and cards cost a transaction fee.

I see gas stations offer lower prices for cash vs credit

[ClevelandBronco]

I'd hesitate to do it unless I knew that I had a very devoted and fairly upscale clientele. It would help as well if I knew that they didn't have a tribal leader whose departure might trigger a mass exodus.

I think it's a good idea in a vacuum. I would be okay with it personally.

[Raiderhater]

The establishment does not eat the tax. As you say, it is built into the price, just as it is when they buy from their retailer. No one is eating the tax.

[AustinChief]

Originally Posted by Raiderhader

The establishment does not eat the tax. As you say, it is built into the price, just as it is when they buy from their retailer. No one is eating the tax.

yes, I simply mean that if the business charges $2 for a beer they pay the tax out of tat $2. In this new scenario that would still be true except that they could recoup 8.25% from the customer when doing credit cards. (since the machine can do all that automatically for them it wouldn't be a hassle)

btw here is what is REALLY happening. Texas in it's infinite wisdom has switched from the 14% flat tax on all alcoholic purchases in bar that has mixed beverages to a 6.7% tax PLUS an 8.25% "sales tax" that you can pass on to customers. That's all fine and dandy for restaurants or maybe hotel bars but not for your average bar. You don;t want to sell a $2 beer and then ask them for $2.16. SO you end up paying the tax out of the $2 which sucks because now you just got your taxes raised a point. So I was wondering "what if the bar simply added it to cc transactions?" Even if everyone switched to cash you would still be saying money because the .95% extra tax you are paying next year would be offset by the 2-3% you would save on CC transaction fees. BUT if everyone continued to use credit cards... then the taxes you pay would actually be dropping from 14% to 6.7% because the consumer would pick up the 8.25%.

[Lex Luthor]

I can imagine that at least one pissed off customer would cause a scene every single day.

It sounds like a headache to me.

[DeezNutz]

Originally Posted by Raiderhader

The establishment does not eat the tax. As you say, it is built into the price, just as it is when they buy from their retailer. No one is eating the tax.

Exactly.

The business would be raising prices. Period. Better be a damn good bar, a really good damn bar, or I'm finding a new one.

[Raiderhater]

Originally Posted by AustinChief

yes, I simply mean that if the business charges $2 for a beer they pay the tax out of tat $2. In this new scenario that would still be true except that they could recoup 8.25% from the customer when doing credit cards. (since the machine can do all that automatically for them it wouldn't be a hassle)

Obviously as I am not in that business down there any longer I am unfamiliar with these new changes. And the way you are describing it is confusing me a little. Because you still keep saying eating and recouping. There is no eating or recouping because it is all figured into the price. That two dollar beer is set at two dollars factoring in the 8.25% tax. Just as the .79 cents a bottle the bar bought it for factored in the the tax.

I'm just not following what you are saying.

[AustinChief]

Originally Posted by DeezNutz

Exactly.

The business would be raising prices. Period. Better be a damn good bar, a really good damn bar, or I'm finding a new one.

look at it from the bar's perspective. It's either THAT or ACTUALLY raise prices because the state doesn't care and the TAXES ARE GOING UP.

So your $2 beer is either going up to $2.25 or $2.00+$.16 in tax.

[Reaper16]

Wouldn't that make the prices real confusing? Like, say a craft beer is $7 normally. That includes sales tax. So now, you'd be asking a cash-paying customer to hand over $6.43? I wouldn't think that bars would want to deal with that kind of coin situation.

So they'd probably raise prices in order to avoid it. Which means I wouldn't really like it if a bar pulled this stunt.

[Raiderhater]

Originally Posted by DeezNutz

Exactly.

The business would be raising prices. Period. Better be a damn good bar, a really good damn bar, or I'm finding a new one.

When Buffalo Wild Wings moved into Tyler, TX people started noticing a liquor sales tax on the receipt. Now either they took the time to separate that cost out so you could see exactly what you were paying in tax, OR given that the price of drinks was not significantly lower compared to any where else in town (like you would expect with the tax not built in), they were double charging you on the tax.

Pretty sure I know the answer to that.

[DeezNutz]

Originally Posted by AustinChief

look at it from the bar's perspective. It's either THAT or ACTUALLY raise prices because the state doesn't care and the TAXES ARE GOING UP.

So your $2 beer is either going up to $2.25 or $2.00+$.16 in tax.

They are actually raising prices. If it's warranted because of outside factors, OK. But breaking up the tax has nothing to do with it, IMO.

Just my thoughts. Not saying I'm definitively right on this.

[Raiderhater]

Originally Posted by Reaper16

Wouldn't that make the prices real confusing? Like, say a craft beer is $7 normally. That includes sales tax. So now, you'd be asking a cash-paying customer to hand over $6.43? I wouldn't think that bars would want to deal with that kind of coin situation.

So they'd probably raise prices in order to avoid it. Which means I wouldn't really like it if a bar pulled this stunt.

No one is going to eat the sales tax. That is just foolish business management. The notion that someone would is crazy talk.

[AustinChief]

Originally Posted by Raiderhader

Obviously as I am not in that business down there any longer I am unfamiliar with these new changes. And the way you are describing it is confusing me a little. Because you still keep saying eating and recouping. There is no eating or recouping because it is all figured into the price. That two dollar beer is set at two dollars factoring in the 8.25% tax. Just as the .79 cents a bottle the bar bought it for factored in the the tax.

I'm just not following what you are saying.

Ok let me go again and try to be clear.

Current Texas law is... Bars do NOT pay sales tax on alcohol. Period. They pay a flat 14% TABC tax on anything with alcohol in it. Beer, Wine, booze. This is only for mixed beverage bars. Beer and Wine only places only pay whatever regular city/state sales tax ends up being... they may as well be selling sno cones so let's ignore them.

Starting January 1st. The law goes screwy. The flat TABC tax goes to 6.7% BUT you also have to collect 8.25% "sales tax" of course it really isn't sales tax because it still goes directly to TABC and still applies across the board to all alcohol. So basically they just popped every bar for an additional .95% in tax. BUT they give you an out by letting the bar pass the 8.25% to the customers just like regular businesses do.

The problem is that you can't do that easily on cash purchases but you can on credit cards.

[AustinChief]

Originally Posted by Raiderhader

When Buffalo Wild Wings moved into Tyler, TX people started noticing a liquor sales tax on the receipt. Now either they took the time to separate that cost out so you could see exactly what you were paying in tax, OR given that the price of drinks was not significantly lower compared to any where else in town (like you would expect with the tax not built in), they were double charging you on the tax.

Pretty sure I know the answer to that.

I'm also almost certain that was illegal to do. Only AFTER Jan. 1st will that be legal and then it will be shown as 8.25% sales tax. And I guarantee you EVERY restaurant will do this on all purchases.