How does one deal with sales tax on supplies that go into products sold?
I have been buying supplies for my clients and getting reimbursed, and then
charging only for my labor. I figure sales tax gets paid on everything
once, and everyone should be happy. Is this an acceptable method?

Is it possible to avoid paying sales tax on supplies, and then charge sales
tax on the entire project? The net result is the same. If so, how does one
get a tax exempt certificate?. (I have two for various non-profits I work
with, but I suppose I should have one of my own.)

Any other alternatives?
Thanks.

"John" writes:

Is it possible to avoid paying sales tax on supplies, and then charge sales
tax on the entire project? The net result is the same. If so, how does one
get a tax exempt certificate?. (I have two for various non-profits I work
with, but I suppose I should have one of my own.)

Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect sales
tax. You can probably only avoid sales tax on lumber and such going into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.

In general, if you are creating a piece of furniture, you will need to
charge sales tax on the selling price of the furniture.

I ran a small business and 99% of what I sold didn't require sales tax so
I never collected sales tax on anything. I also never paid use tax on
mail order purchases. I ended up paying $7,000 in sales/use tax going
back 5 years. No penalty as I cooperated and actually did a self audit.

Brian Elfert

John,

Been awhile but you may not want that tax exempt certificate. As I recall,
we had to file a quarterly sales tax report and it was a pain at that time
(10 years ago). May just want to pay the tax on the materials and pass that
on in the cost of the project and avoid the freakin hassle with NYS.

Bob S.


"John" wrote in message
...
How does one deal with sales tax on supplies that go into products sold?
I have been buying supplies for my clients and getting reimbursed, and
then
charging only for my labor. I figure sales tax gets paid on everything
once, and everyone should be happy. Is this an acceptable method?

Is it possible to avoid paying sales tax on supplies, and then charge
sales
tax on the entire project? The net result is the same. If so, how does
one
get a tax exempt certificate?. (I have two for various non-profits I work
with, but I suppose I should have one of my own.)

Any other alternatives?
Thanks.

John wrote:
How does one deal with sales tax on supplies that go into products
sold?
I have been buying supplies for my clients and getting reimbursed,
and then
charging only for my labor. I figure sales tax gets paid on
everything
once, and everyone should be happy. Is this an acceptable method?


Yes, this is acceptable. But I believe you need to get a Certificate of
Authority from the state to collect sales tax for the labor portion.

This may be helpful. (Sales tax info is on page 18.)

http://www.tax.state.ny.us/pdf/publi.../pub20_703.pdf


Is it possible to avoid paying sales tax on supplies, and then charge
sales
tax on the entire project? The net result is the same. If so, how
does one
get a tax exempt certificate?. (I have two for various non-profits I
work
with, but I suppose I should have one of my own.)

Any other alternatives?
Thanks.

You do not get a "tax exempt certificate" as you are not tax exempt.
When you purchase the materials you indicate to the seller that you are
purchasing them for resale. They will ask that you complete a resale
certificate for their files and will not collect (sales tax is
collected, not charged) the sales tax. Here is a copy of a NYS Resale
Certificate.

http://www.tax.state.ny.us/pdf/1999/st/st120_699.pdf

"John" wrote in message
...
How does one deal with sales tax on supplies that go into products sold?
I have been buying supplies for my clients and getting reimbursed, and
then charging only for my labor. I figure sales tax gets paid on
everything once, and everyone should be happy. Is this an acceptable
method?

This is in Texas but NY may not be that different.

For supplies that go in to a project such as varnish, stain, screws, I do
not pay sales tax so long as it is for furniture.
In Texas, The whole piece of furniture is taxable. The price you sell the
piece for is taxable regardless of how much is parts and or labor. You do
not have to pay sales tax on the materials for this purpose. WORDING on
your invoice is very important.
In Texas the sales tax laws differ greatly.

My suggestion is to call the local NY State Comptrollers Office and ask
when they are the least busy. Go to that office and get set up legimately
and describe what kind of business you plan on doing and exactly what you
will be selling. They can tell you exactly what to pay tax on and what to
charge tax on.


Is it possible to avoid paying sales tax on supplies, and then charge
sales tax on the entire project?

In Texas maybe. If the work is being done to a customers personal home/
property and cannot be removed with out also doing repairs the job is not
taxable and I must pay sales tax when I pay materials. An example would be
adding a wall, replacing an old fence, or adding built in cabinets.

If my work can be removed with out having to do repairs the job is taxable
and I do not have to pay taxes on materials that go in to that job. Tools
are taxable. Blades, drill bits and such that have a life expentancy of
less that 6 months are not taxable to me when I buy them.

The net result is the same.

In Texas it is not. The sales tax on a piece of furniture that you sell
would be greater than the sales tax on the materials that you bought.

If so, how does one
get a tax exempt certificate?.

IIRC in Texas you must first be licensed to do business. Then go to the
State Comptrollers Office and get your Sales Tax Permit.

"John" wrote in message
...
How does one deal with sales tax on supplies that go into products sold?
I have been buying supplies for my clients and getting reimbursed, and
then
charging only for my labor. I figure sales tax gets paid on everything
once, and everyone should be happy. Is this an acceptable method?

Not really.


Is it possible to avoid paying sales tax on supplies, and then charge
sales
tax on the entire project? The net result is the same. If so, how does
one
get a tax exempt certificate?. (I have two for various non-profits I work
with, but I suppose I should have one of my own.)


You go to the local municiple offices and register as a small business (DBA)
and obtain an tax number. For DBA's in NY, it's typically your SSAN. Armed
with that, you can now purchase tax exempt and charge sales tax based on the
final product, which you have to submit to NY on a quarterly basis. Don't
be late - they are not a forgiving group of people.

Any other alternatives?

None needed. The DBA route is a really easy route and it works well.
Simple bookkeeping - no accountant needed, just keep records, collect tax
and hand it over to the state.
--

-Mike-

"Brian Elfert" wrote in message
...
"John" writes:

Is it possible to avoid paying sales tax on supplies, and then charge
sales
tax on the entire project? The net result is the same. If so, how does
one
get a tax exempt certificate?. (I have two for various non-profits I
work
with, but I suppose I should have one of my own.)

Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect sales
tax. You can probably only avoid sales tax on lumber and such going into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.


Nope. Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc.


--

-Mike-

"BobS" wrote in message
...
John,

Been awhile but you may not want that tax exempt certificate. As I
recall,
we had to file a quarterly sales tax report and it was a pain at that time
(10 years ago). May just want to pay the tax on the materials and pass
that
on in the cost of the project and avoid the freakin hassle with NYS.


Not so bad an ordeal Bob. The forms are really pretty simple and simple
record keeping makes the forms a less than one hour effort every quarter.
Having said that, there is a certain value in not providing NYS any more
information about yourself than is absolutely necessary.
--

-Mike-

"A.M. Wood" wrote in message
oups.com...


You do not get a "tax exempt certificate" as you are not tax exempt.
When you purchase the materials you indicate to the seller that you are
purchasing them for resale. They will ask that you complete a resale
certificate for their files and will not collect (sales tax is
collected, not charged) the sales tax. Here is a copy of a NYS Resale
Certificate.

http://www.tax.state.ny.us/pdf/1999/st/st120_699.pdf


Correct - you provide your tax number which makes your purchase exempt from
sales tax.

--

-Mike-

Mike Marlow wrote:
Don't be late - they are not a forgiving group of people.


Going to add some emphasis to this very important point. ALso, ALWAYS
send the return Certified Mail with a Return Receipt. Save your post
office receipts too. You wouldn't be the first person who filed on
time and was charged a late payment penalty. Happened a lot in one
company I was working for.

"Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc. "

All supplies related to the manufacturing process are tax exempt. But
unless you are re-selling the power tools then you need to pay sales
tax when you purchase those items.

"A.M. Wood" wrote in message
oups.com...
"Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc. "

All supplies related to the manufacturing process are tax exempt. But
unless you are re-selling the power tools then you need to pay sales
tax when you purchase those items.


You might just be right about that, but I seemed to recall that if they were
used for the business that they were exempt. They did though, become
assets. Are you certain about this?

--

-Mike-

"Mike Marlow" wrote in message

You might just be right about that, but I seemed to recall that if they
were
used for the business that they were exempt. They did though, become
assets. Are you certain about this?

--

Never paid tax on a machine or tool used directly in manufacturing. Tools
for maintenance are taxable, as are computers, janitorial supplies. These
are general state regulations, your state may vary.

Be sure to pay Use tax also. You will be audited at some point and they
look for that sort of thing. Good record keeping is VERY important.
--
Ed
http://pages.cthome.net/edhome/

Mike Marlow wrote:
"A.M. Wood" wrote in message
oups.com...
"Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc. "

All supplies related to the manufacturing process are tax exempt.
But
unless you are re-selling the power tools then you need to pay
sales
tax when you purchase those items.


You might just be right about that, but I seemed to recall that if
they were
used for the business that they were exempt. They did though, become
assets. Are you certain about this?

--

-Mike-



I stand corrected.

"The production exemption applies to to purchases of machinery and
equipment used directly and predominantly in the production process."

http://www.tax.state.ny.us/pdf/publi...ub852_1297.pdf


Thanks Mike

So no NYS sales tax on power tools. If you took the time to set up
your shop as a business. Just sell a few things you make on e-bay
every year

"Edwin Pawlowski" wrote in message
m...

"Mike Marlow" wrote in message

You might just be right about that, but I seemed to recall that if they
were
used for the business that they were exempt. They did though, become
assets. Are you certain about this?

--

Never paid tax on a machine or tool used directly in manufacturing. Tools
for maintenance are taxable, as are computers, janitorial supplies. These
are general state regulations, your state may vary.

Be sure to pay Use tax also. You will be audited at some point and they
look for that sort of thing. Good record keeping is VERY important.

I filled out my form #17 tonight.
But what the heck is Use tax?!

"John" wrote in message

I filled out my form #17 tonight.
But what the heck is Use tax?!

Use tax is what you pay when you buy a taxable item from out of state and
the seller did not collect sales tax. Lets say you buy an answering machine
from Amazon for $100. They will not charge you tax, but your home state
wants their cut. You must voluntarily report and pay it. If not, if an
auditor finds it you will pay the tax, plus possible interest and penalties.
If you show a pattern of avoiding paying sales tax, they will be sure to
audit you frequently. Yes, you have a state employee sitting in your office
going over your records. Isn't being in business fun?
--
Ed
http://pages.cthome.net/edhome/

"Mike Marlow" wrote in message
I don't believe we have a use tax in NY.

--

-Mike-





Oh, yes you do. Even as an individual you are liable for it.
http://www.tax.state.ny.us/pdf/publi...ub852_1297.pdf

Get the proper form he
http://www.tax.state.ny.us/forms/sales_cur_forms.htm

ST-100. It goes in column D

snip of some godawful thread about sales tax

Here in Oregon, I don't pay sales tax on my supplies, tools or even my
auto for that matter. I also am not required to send in sales taxes or
file reports to the state. Then again, we have no sales tax.

Oh thank you dear Lord! It's so much easier to buy things, sell things,
run a business, and live life without sales taxes. I lived in Arizona
for almost 10 years and the sales tax department was like the Amish
Gestapo. Some years they were all nice and friendly: "no, you do not
have to pay sales tax on the film you use to shoot your professional
jobs as long as you itemize, bill it to the client and collect the taxes
for us." Other years they had specific business sectors all running
around like scared little rabbits: "We're auditing all photographers,
because there appears to be a trend of purchasing film used to shoot
professional jobs under tax-exempt status. It makes no difference if the
client is billed and taxed as the original film is no longer in the same
form as when it was purchased - therefore the photographer is the end
user." Audits, back taxes, interest and penalties.

It is soooo much easier to see a price of abucktwoninetynine, counting
the change in yer pocket and forking over abucktwoninetynine.

--
Owen Lowe and his Fly-by-Night Copper Company
____

"Sure we'll have fascism in America, but it'll come disguised
as 100% Americanism." -- Huey P. Long

Brian Elfert wrote:
"John" writes:


Is it possible to avoid paying sales tax on supplies, and then charge sales
tax on the entire project? The net result is the same. If so, how does one
get a tax exempt certificate?. (I have two for various non-profits I work
with, but I suppose I should have one of my own.)


Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect sales
tax. You can probably only avoid sales tax on lumber and such going into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.

In general, if you are creating a piece of furniture, you will need to
charge sales tax on the selling price of the furniture.

What he said is generally true here in CT.

Check with a local CPA or the tax authority. I usually find CPA's to be
easier to deal with and sometimes more accurate than the folks answering
the phone at the State DRS.

The rules can be slightly different for furniture vs. built-ins or
finish carpentry, just as they can in regulatory issues. One is the
often the installation of customer provided material (home improvement
or construction), the other is sometimes called manufacturing (furniture
and cabinets).

Ask a tax pro familiar with your locale. Some states require that
collected sales tax be kept in a separate bank account.

Barry

A.M. Wood wrote:

All supplies related to the manufacturing process are tax exempt. But
unless you are re-selling the power tools then you need to pay sales
tax when you purchase those items.

Right. Some states call this "use tax", and collect it at the same rate
and through the same channels as "sales tax".

Barry

"Fly-by-Night CC" wrote in message
news
snip of some godawful thread about sales tax

Here in Oregon, I don't pay sales tax on my supplies, tools or even my
auto for that matter. I also am not required to send in sales taxes or
file reports to the state. Then again, we have no sales tax.



Here they give you 3% or so of the tax you collected just for filling out
the forms and writing the check. What could be simpler?

Certainly not the high income tax you guys pay.

"Edwin Pawlowski" wrote in message
. com...

"Mike Marlow" wrote in message
I don't believe we have a use tax in NY.

--

-Mike-





Oh, yes you do. Even as an individual you are liable for it.
http://www.tax.state.ny.us/pdf/publi...ub852_1297.pdf

OK, I stand corrected in that we do have a use tax as a part of what we all
think of as sales tax, but I don't see anything in the code that requires
paying tax on mail order items as was the original comment that I replied
to. In fact, the instructions for column D on the ST-100 specifically
exempt purchases that meet the criteria for exemption of sales tax - even
when purchased elsewhere. So - I'll modify my original reply to state that
we are not liable for use tax on mail order tools or supplies that otherwise
would have met the criteria for exemption had they been purchased locally.


--

-Mike-

B a r r y wrote:
Brian Elfert wrote:
"John" writes:


Is it possible to avoid paying sales tax on supplies, and then
charge sales
tax on the entire project? The net result is the same. If so, how
does one
get a tax exempt certificate?. (I have two for various non-profits
I work
with, but I suppose I should have one of my own.)


Call your state dept of revenue on this. They will be happy to
answer
your question. You will need to register with the state to collect
sales
tax. You can probably only avoid sales tax on lumber and such
going into
a specific project. General shop supplies like sandpaper and such
you
will probably have to pay tax on.

In general, if you are creating a piece of furniture, you will need
to
charge sales tax on the selling price of the furniture.

What he said is generally true here in CT.

Check with a local CPA or the tax authority. I usually find CPA's to
be
easier to deal with and sometimes more accurate than the folks
answering
the phone at the State DRS.

The rules can be slightly different for furniture vs. built-ins or
finish carpentry, just as they can in regulatory issues. One is the
often the installation of customer provided material (home
improvement
or construction), the other is sometimes called manufacturing
(furniture
and cabinets).

Ask a tax pro familiar with your locale. Some states require that
collected sales tax be kept in a separate bank account.

Barry


FYI

NYS Info on Capital Improvements & Repairs to Real Property

http://www.tax.state.ny.us/pdf/publi...pub862_401.pdf


For a list of all of the NYS Sales Tax Publications

http://www.tax.state.ny.us/pubs_and_...sales_pubs.htm

PUB 750, A GUIDE TO SALES TAX IN NYS, has a link to "Important Vendor
Registration Information"
http://www.tax.state.ny.us/pdf/publi...pub862_401.pdf

"Mike Marlow" writes:

Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect sales
tax. You can probably only avoid sales tax on lumber and such going into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.


Nope. Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc.

Power tools would generally be considered a capital purchase and would be
taxable unless the state is exempting tax on capital purchases for
manufacturer as many are.

Brian Elfert

"Brian Elfert" wrote in message
...
"Mike Marlow" writes:

Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect
sales
tax. You can probably only avoid sales tax on lumber and such going
into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.


Nope. Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc.

Power tools would generally be considered a capital purchase and would be
taxable unless the state is exempting tax on capital purchases for
manufacturer as many are.


Depends on what you are. If you're a contractor, then yes. If you're a
manufacturer or a number of other categories defined by NYS, then no. It's
spelled out pretty clearly by the state. For the shop guy who is building
tables to sell, the power tools are exempt if they are predominantly used
for the manufacturing work. Though it is indeed hard to believe, NYS is
actually quite clear on this one... for a change.
--

-Mike-

"Edwin Pawlowski" writes:

If you show a pattern of avoiding paying sales tax, they will be sure to
audit you frequently. Yes, you have a state employee sitting in your office
going over your records. Isn't being in business fun?

My former business was audited once. The lady was the sterotypical
government employee. She was mean, nasty, and just plain rude. I think
she went to anti-charm school as a youth.

My failure to pay sales and use tax was due to lack of knowledge and not
deliberate. I self audited everything prior to the current year and
didn't have to pay any penalties.

Brian Elfert

In article ,
Mike Marlow wrote:

"Brian Elfert" wrote in message
...
"John" writes:

Is it possible to avoid paying sales tax on supplies, and then charge
sales
tax on the entire project? The net result is the same. If so, how does
one
get a tax exempt certificate?. (I have two for various non-profits I
work
with, but I suppose I should have one of my own.)

Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect sales
tax. You can probably only avoid sales tax on lumber and such going into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.


Nope. Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc.

BZZZZT! *ONLY* materials purchased _for resale_ are legally exempt.

Robert Bonomi wrote:


Nope. Armed with his tax certificate, his materials are all tax
exempt.
This includes materials like sandpaper, power tools, etc.

BZZZZT! *ONLY* materials purchased _for resale_ are legally exempt.

That is what I had believed. However, according to the information
posted by New York State on

http://www.tax.state.ny.us/pubs_and_...sales_pubs.htm

a manufacturer does not have to pay sales tax on equipment
predominantly used in the manufacturing process.



See Page 14 "Sales Tax Information For: Manufacturers, Processors,
Generators, Assemblers, Refiners, Miners and Extractors, and Other
Producers of Goods and Merchandise (12/97)"

http://www.tax.state.ny.us/pdf/publi...ub852_1297.pdf

"To be eligible for the production exemption, machinery and equipment
must be used directly and predominantly (more than 50% of the time) in
the production of tangible personal property..."



See Page 15 "A Guide to Sales Tax in New York State (8/04)"

http://www.tax.state.ny.us/pdf/publi...pub750_804.pdf

"A manufacturer is required to register as a vendor for sales tax
purposes in order to use exemption documents to purchase raw
materials, machinery, equipment, parts, tools, supplies, and related
services without paying sales tax on its purchases."

"Robert Bonomi" wrote in message
...
In article ,
Mike Marlow wrote:

"Brian Elfert" wrote in message
...
"John" writes:

Is it possible to avoid paying sales tax on supplies, and then charge
sales
tax on the entire project? The net result is the same. If so, how
does
one
get a tax exempt certificate?. (I have two for various non-profits I
work
with, but I suppose I should have one of my own.)

Call your state dept of revenue on this. They will be happy to answer
your question. You will need to register with the state to collect
sales
tax. You can probably only avoid sales tax on lumber and such going
into
a specific project. General shop supplies like sandpaper and such you
will probably have to pay tax on.


Nope. Armed with his tax certificate, his materials are all tax exempt.
This includes materials like sandpaper, power tools, etc.

BZZZZT! *ONLY* materials purchased _for resale_ are legally exempt.



Not true Robert. Read the NYS code on it - it's really clear. Materials
and tools used in the actual production are tax exempt.
--

-Mike-

In article , "George" george@least
wrote:

Here they give you 3% or so of the tax you collected just for filling out
the forms and writing the check. What could be simpler?

Certainly not the high income tax you guys pay.

Well I think it all evens out no matter which state you live in - sales
tax, use tax, fuel tax, property tax, income tax, it doesn't really
matter, they get it in the end one way or t'other. I'm happier paying
lump sums in property and income taxes than feeling nickel and dimed to
death every day on every purchase.

Additionally I find it incredibly convenient for the price indicated to
be the same amount of dough I pull out of my pocket at the register. And
I'm happy to no longer have to deal with the state sales tax department
- even if the form is simple, they (at least Arizona) had a nasty
reputation with collecting requirements which, as I indicated in my
previous reply, seemed to fluctuate depending on the season, the moon
phase, or the budget crisis du jour. I was much more anxious about a
state sales tax audit than one from the IRS.

--
Owen Lowe and his Fly-by-Night Copper Company
____

"Sure we'll have fascism in America, but it'll come disguised
as 100% Americanism." -- Huey P. Long

"Fly-by-Night CC" wrote in message
news

Additionally I find it incredibly convenient for the price indicated to
be the same amount of dough I pull out of my pocket at the register. And
I'm happy to no longer have to deal with the state sales tax department
- even if the form is simple, they (at least Arizona) had a nasty
reputation with collecting requirements which, as I indicated in my
previous reply, seemed to fluctuate depending on the season, the moon
phase, or the budget crisis du jour. I was much more anxious about a
state sales tax audit than one from the IRS.

Convenient? If there's no sales tax, why can't the bozos charge six bucks
versus five ninety-nine? I folded my taxes into my show prices after my
daughter told me she'd never help sell again as long as I was making change.
Most people appreciate that.

Death and taxes, and the occasional bond issue....

In article , George george@least wrote:

"Fly-by-Night CC" wrote in message
news

Additionally I find it incredibly convenient for the price indicated to
be the same amount of dough I pull out of my pocket at the register. And
I'm happy to no longer have to deal with the state sales tax department
- even if the form is simple, they (at least Arizona) had a nasty
reputation with collecting requirements which, as I indicated in my
previous reply, seemed to fluctuate depending on the season, the moon
phase, or the budget crisis du jour. I was much more anxious about a
state sales tax audit than one from the IRS.

Convenient? If there's no sales tax, why can't the bozos charge six bucks
versus five ninety-nine?

There _are_ reasons for that 'odd amount' pricing. Grounded in psychology,
not 'rational reasoning'. Research studies have shown -- repeatedly -- that:
(a) people's "resistance point" to a price is almost always an 'even amount',
and that it _is_ a "threshold" trigger. sales resistance is a *LOT*
less if you're even "a little bit" under that threshold, vs over it.
(b) *MOST* people do not compare all the way out to the _last_digit_ when
comparing prices, when the 'earlier' digits are different.
$19.99 vs $20.00 is _percieved_ differently than $20.40 vs. $20.41

Rational? Heck, no.

"Real world"? Heck, *yes*.

"Robert Bonomi" wrote in message
...
In article , George george@least wrote:

"Fly-by-Night CC" wrote in message
news

Additionally I find it incredibly convenient for the price indicated to
be the same amount of dough I pull out of my pocket at the register.
And
I'm happy to no longer have to deal with the state sales tax department
- even if the form is simple, they (at least Arizona) had a nasty
reputation with collecting requirements which, as I indicated in my
previous reply, seemed to fluctuate depending on the season, the moon
phase, or the budget crisis du jour. I was much more anxious about a
state sales tax audit than one from the IRS.

Convenient? If there's no sales tax, why can't the bozos charge six
bucks
versus five ninety-nine?

There _are_ reasons for that 'odd amount' pricing. Grounded in
psychology,
not 'rational reasoning'. Research studies have shown -- repeatedly --
that:
(a) people's "resistance point" to a price is almost always an 'even
amount',
and that it _is_ a "threshold" trigger. sales resistance is a *LOT*
less if you're even "a little bit" under that threshold, vs over it.
(b) *MOST* people do not compare all the way out to the _last_digit_
when
comparing prices, when the 'earlier' digits are different.
$19.99 vs $20.00 is _percieved_ differently than $20.40 vs. $20.41

Rational? Heck, no.

"Real world"? Heck, *yes*.

Yeah, I took some courses in advertising. But it's still stupid.

In article , George george@least wrote:

"Robert Bonomi" wrote in message
...
In article , George george@least wrote:

"Fly-by-Night CC" wrote in message
news

Additionally I find it incredibly convenient for the price indicated to
be the same amount of dough I pull out of my pocket at the register.
And
I'm happy to no longer have to deal with the state sales tax department
- even if the form is simple, they (at least Arizona) had a nasty
reputation with collecting requirements which, as I indicated in my
previous reply, seemed to fluctuate depending on the season, the moon
phase, or the budget crisis du jour. I was much more anxious about a
state sales tax audit than one from the IRS.

Convenient? If there's no sales tax, why can't the bozos charge six
bucks
versus five ninety-nine?

There _are_ reasons for that 'odd amount' pricing. Grounded in
psychology,
not 'rational reasoning'. Research studies have shown -- repeatedly --
that:
(a) people's "resistance point" to a price is almost always an 'even
amount',
and that it _is_ a "threshold" trigger. sales resistance is a *LOT*
less if you're even "a little bit" under that threshold, vs over it.
(b) *MOST* people do not compare all the way out to the _last_digit_
when
comparing prices, when the 'earlier' digits are different.
$19.99 vs $20.00 is _percieved_ differently than $20.40 vs. $20.41

Rational? Heck, no.

"Real world"? Heck, *yes*.

Yeah, I took some courses in advertising. But it's still stupid.

Welcome to the real world. grin

The fact remains that if you want to maximize sales, you _do_ set prices the
'stupid' way. BECAUSE the competition does it that way, you really don't
have much choice about it.

"Robert Bonomi" wrote in message
Convenient? If there's no sales tax, why can't the bozos charge six
bucks
versus five ninety-nine?

The fact remains that if you want to maximize sales, you _do_ set prices
the
'stupid' way. BECAUSE the competition does it that way, you really don't
have much choice about it.

How about we eliminate pennies? Many ears ago if you bought a pack of
cigarettes in a vending machine for a quarter, there were two pennies change
in the wrapper. Penny candy would keep a kid happy. They are useless
today.

Whenever you make a purchase under $100, the total paid should be rounded
off to the nearest nickel. For purchases over that amount, round to the
nearest dollar.
--
Ed
http://pages.cthome.net/edhome/

In article , "George" george@least
wrote:

Convenient? If there's no sales tax, why can't the bozos charge six bucks
versus five ninety-nine?

As one who spots and retrieves most pennies I see on the ground, I'd
rather get the 1 cent back than pay it for whole dollar pricing. Yes,
it's a goofy mind game in pricing, but that's the way everyone does it,
regardless of sales tax. It only takes 100 stoops to get a buck - helps
the wallet as well as the waistline!

--
Owen Lowe and his Fly-by-Night Copper Company
____

"Sure we'll have fascism in America, but it'll come disguised
as 100% Americanism." -- Huey P. Long

In article ,
Edwin Pawlowski wrote:

"Robert Bonomi" wrote in message
Convenient? If there's no sales tax, why can't the bozos charge six
bucks
versus five ninety-nine?

The fact remains that if you want to maximize sales, you _do_ set prices
the
'stupid' way. BECAUSE the competition does it that way, you really don't
have much choice about it.

How about we eliminate pennies?

Why not start with gasoline prices -- *still* quoted in _tenths_ of a penny?

wry grin

"Edwin Pawlowski" wrote in message
. com...
The fact remains that if you want to maximize sales, you _do_ set prices
the
'stupid' way. BECAUSE the competition does it that way, you really
don't
have much choice about it.

How about we eliminate pennies? Many ears ago if you bought a pack of
cigarettes in a vending machine for a quarter, there were two pennies
change
in the wrapper. Penny candy would keep a kid happy. They are useless
today.

Whenever you make a purchase under $100, the total paid should be rounded
off to the nearest nickel. For purchases over that amount, round to the
nearest dollar.
--

Elimination of the penny and the paper dollar would save a lot of money, and
probably be a push in pocket wear. But, as with the "retail dollar" of
0.99, not likely to go away.

I believe it is still used as an advertising gimmick, and a psychological
trick. "Honey, look that thingamajig that would fit perfectly in my shop is
less than $500, it's only $499.99". You see it all the time even on car
prices, because they can honestly say that the $49,999.95 car is less than
$50K. Somehow you feel better about buying a product because it costs less
than some magical number, but once you are actively aware of it the trick
isn't so effective any more. But, let your guard down any they have you
again.

John C

"Robert Bonomi" wrote in message
...
In article ,
Edwin Pawlowski wrote:

"Robert Bonomi" wrote in message
Convenient? If there's no sales tax, why can't the bozos charge six
bucks
versus five ninety-nine?

The fact remains that if you want to maximize sales, you _do_ set prices
the
'stupid' way. BECAUSE the competition does it that way, you really
don't
have much choice about it.

How about we eliminate pennies?

Why not start with gasoline prices -- *still* quoted in _tenths_ of a
penny?

wry grin