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It happens everywhere, and has as long as I can remember!
Not a ripoff at all.
Well, I do disagree. I think the better approach would be to offer the coupon amount off the item, and not tax the "shelf" price, but tax the price after the coupon. One could argue that by taxing the "shelf" price, in my case at 6%, the coupon is misleading. The discount they advertise on the coupon is decreased by the amount of the tax you have to pay on the shelf vs discounted price.
Nope, the discount is NOT decreased. You are still getting 25 cents (or whatever) off the total price.
True, but my sales tax is on the before discounted price, and therefore a higher amount. I guess it comes down to where you live. Some states have no sales tax and others have high sales taxes, others in between. My solution would be to only charge sales tax on the discounted price, if sales tax applies. Not the case, however. Thanks for posting.
As others have mentioned the pre-coupon amount is subject to any applicable sales & use taxes. If it was a food item in MI, then it should not have been taxed.
Think of it this way... Coupons are used in place of money, they are tender for the item just the same as a dollar bill is. You use the coupon to "pay" for a portion of the price, and pay for the rest of the balance with cash or whatever. Therefore you are paying the full amount of tax because coupons don't actually change the price of the item, they are merely an alternative to some other form of payment.
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It's not a ripoff; it's the way sales tax is calculated. The state doesn't give a flying fig whether you use coupons or not.
