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?

[AustinChief]

Originally Posted by Raiderhader

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

You aren't getting what I am saying. "Eating" the sales tax is the same as "building it into the price". The term is used to denote that you have no "pass through" mechanism to make the consumer pay taxes in addition to advertised prices. And now that has changed.

[Rain Man]

I'll be honest. I despise it when someone offers me a discount for cash instead of a credit card. I use my credit cards all the time because it's easier and I get points on the cards. If a business positions it as a "cash discount", I immediately assume the following:

1. They're planning to not pay the sales tax and are crooked.

2. They're raising my price to use the credit card.

I recognize that the truth could be different, but my immediate reaction is that I have to pay more to use my credit card, and I really don't like it.

[AustinChief]

Originally Posted by DeezNutz

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.

Read my recent posts, I think I wasn't making my self clear enough before.

[BlackHelicopters]

Switch to cash.

[ClevelandBronco]

Originally Posted by AustinChief

...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.

That has to be the message. The state doesn't care. The state doesn't care. The state doesn't care. TAXES ARE GOING UP. This bar is taking action against this bullshit.

Now, raise the price and find a hook that puts the extra 16 cents to work against a state that doesn't care. Make it into a movement that works against the tax and every beer sold contributes in some way to the movement. Hell, in the right kind of a setting with the right kind of message you could even make the 16 cents a voluntary contribution to the cause. It's 16 cents.

Posters of Roosevelt, Jefferson and Lincoln (the faces on the dime, nickel and penny) speaking out against the added cost come to mind.

On the other hand, I don't know. It might not be that kind of bar.

[Raiderhater]

Originally Posted by AustinChief

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.

First: fuck those assholes at TABC. Idiotic, entrapping bureaucrats.

Second: You cannot possibly believe that the current 14% tax is not factored into your alcohol sales and passed onto the customer already?

Third: I do not see the problem with the cash transactions. The computers can easily add that on for cash as they can credit cards. Unless I am still missing something here?

[DeezNutz]

OK, I think I'm following now. But whatever the decision, keep the prices the same, regardless of form of payment.

[Raiderhater]

Originally Posted by Rain Man

I'll be honest. I despise it when someone offers me a discount for cash instead of a credit card. I use my credit cards all the time because it's easier and I get points on the cards. If a business positions it as a "cash discount", I immediately assume the following:

1. They're planning to not pay the sales tax and are crooked.

2. They're raising my price to use the credit card.

I recognize that the truth could be different, but my immediate reaction is that I have to pay more to use my credit card, and I really don't like it.

They have to pay to use your credit card as well. They are charged for every transaction paid for with plastic. Thus, it it is cheaper for them to deal in cash.

[007]

Originally Posted by theelusiveeightrop

Switch to cash.

I won't even to to places that charge extra for using credit. Very few exist anymore though.

[Rain Man]

Also, note that it will annoy people who didn't bring in a ton of cash. First, they'll complain that they don't have enough cash. If they don't, they'll be made that they're paying more than other people for the same product. If they do, then they'll peel some bills out of their wallet to pay for it and will mentally treat the bar as being cash only, which means they'll leave relatively quickly and head to a bar where they can use their card.

I'm really not a fan of the idea.

[Rain Man]

Originally Posted by Raiderhader

They have to pay to use your credit card as well. They are charged for every transaction paid for with plastic. Thus, it it is cheaper for them to deal in cash.

I agree that this is true. I look at it as a cost of doing business, though. They shouldn't involve me in their dealings with their vendors.

[Raiderhater]

Originally Posted by AustinChief

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.

I think you are correct on the illegality of it. And as wrong and fucked up as it is, I'll be damned if I am going to call those TABC assholes on them.

[Raiderhater]

Originally Posted by Rain Man

I agree that this is true. I look at it as a cost of doing business, though. They shouldn't involve me in their dealings with their vendors.

But, all of a merchant's dealings with their vendors involve you. The more a vendor charges, they more you are going to get charged. That is just simple math and a necessary business requirement.

[AustinChief]

Originally Posted by Raiderhader

First: fuck those assholes at TABC. Idiotic, entrapping bureaucrats.

Second: You cannot possibly believe that the current 14% tax is not factored into your alcohol sales and passed onto the customer already?

Of course it is, but there is currently no way to pass that on without having to change ADVERTISED prices. There is a big difference in perception for some people when it comes to a $2 beer and a $2.25 beer. All fine and dandy when you have a level playing field but now with the new craptastic system restaurants get a clear edge because everyone EXPECTS taxes on the bill there.

Originally Posted by Raiderhader

Third: I do not see the problem with the cash transactions. The computers can easily add that on for cash as they can credit cards. Unless I am still missing something here?

Imagine bartending and a guy orders a $2 Bud. He stuffs a dollar in the tip jar and hands you $2.. you gonna say "hey it's $2.16 with tax, gonna need 16 cents man." What a complete cluster****.

Your only choice is to take it in the ass and lose a couple grand a month OR raise prices overtly OR this solution which is to add the 8.25% sales tax to CC tabs because then it's seemless.

The ONLY drawback would be customer reactions to seeing the sales tax on the tab. I figure 80% of us are so trained to see sales tax that most wouldn't even notice.

[Raiderhater]

Originally Posted by AustinChief

You aren't getting what I am saying. "Eating" the sales tax is the same as "building it into the price". The term is used to denote that you have no "pass through" mechanism to make the consumer pay taxes in addition to advertised prices. And now that has changed.

Then you and I define "eating" (as it applies to money) in two very different ways.