Sales Tax

[jpo183]

Curious how you are handling sales tax for your machines. I see everyone adding on sales tax in their cost of goods. 

 If I go into the store and a bottle of soda is $1.25 they tack on sales tax on top of that.  Is that how you are handling this?  With the movement to cashless, this seems to be an easier way of making up that portion and passing it directly to the consumer (as it should be). I know in some states you are required to separate the cost of the sales tax vs the product.

If I am using a coin/dollar accepter and I am selling that bottle of soda (assume 6% tax) at 1.25, the cost of the tax is actually .08 in addition.  If you do it reverse where $1.25 is your total cost including tax the cost for that soda is $1.17 and the .08 is reported as tax.

Paying that tax for the customer (6% of the sale) seems stupid as this is not normal in any other store, as well as it takes a big chunk of change out of your profits.

[orsd]

Depends on state. 
Many states treat vending sales differently, or have different rules for different vend prices and product types.

In any case, I treat all taxes and fees as included in the purchase price.

For instance, a vend price of 1.00 at 10% tax is a sale price of 90.9 cents with 9.1 cents sales tax included.

While regular stores do not do this, we have to as people expect the posted price to be the price. Also, we do not have the ability to make penny change, and usually quarter pricing increments are preferred due to changer inventory. So we set our vend prices accordingly, with the cost of the tax accounted for. 

Edited April 18, 2021 by orsd

[AZVendor]

You have to build sales tax into your pricing because you will pay tax on all of your gross sales. Figure out what your profit per $1 sold needs to be and adjust your selling price accordingly. I can tell you that no normal vendor does that. Prices are set wherever the vendor deems they need to be, accounting for many fixed and variable costs. However, most vendors just shoot from the hip and try not to price so high that they lose a location to a competitor. Don't over-think it.

[jpo183]

22 hours ago, AZVendor said:

You have to build sales tax into your pricing because you will pay tax on all of your gross sales. Figure out what your profit per $1 sold needs to be and adjust your selling price accordingly. I can tell you that no normal vendor does that. Prices are set wherever the vendor deems they need to be, accounting for many fixed and variable costs. However, most vendors just shoot from the hip and try not to price so high that they lose a location to a competitor. Don't over-think it.

 

Totally get it, with the move to more cashless I am curious if this is a trend that will take off.  I just saw that Coke will be increasing their prices to FYI.  I see vending as a "convenience store" option on site.  If the store takes credit cards, why not simply charge the tax separate like any other.  I totally get it if your doing cash, however unless its in an area that does not have cards (heavy hispanic) to me it doesnt nessacsarly seem like a big deal?  I can tell you in my other business, sales tax is now being introduced in software, and adding the tax is exactly what we and competitors are doing.  Its $xxxxxx + tax.

Right now I am in the planning and research stage, so just testing theories, talking to people that have been doing it, etc.

[Southeast Treats]

I don't think that vending card processors are set up to "add on" sales tax as a checkout option.  All of them offer "two-tier" pricing so that you can charge for card acceptance, but that is at a flat rate per item.  Plus, you would still not be able to add sales tax on cash purchases.   The ability to add sales tax at checkout is one of the supposed selling points of micromarket kisoks; but the math is handled in the kisok software, not the card processing.  And you still run into the issue of no penny change, which micromarkets don't offer but avoid the issue by focusing on or even forcing cashless transactions and prepaid accounts.