questionswhy don't more fast food places pay for sales tax?


Those places that "pay" for tax are probably not reporting their income to the IRS or the state and not paying any tax at all (sales or income tax). In Maryland, companies are not allowed to pay the tax (they can have a discount equal to the tax but they can't advertise that they are paying the tax).


My guess is that they don't actually pay your tax, they just put the post-tax amount on the menu, and they really charge you $2.34 for the item, then add the 7% tax to come to a total of $2.50, or whatever the tax rate is...


Also, there are two reasons why companies would charge $2.49 rather than $2.50. One reason is the psychology factor in that $2.49 sounds like a lot less than $2.50 (if you aren't paying much attention). The other reason is that it makes it more difficult for employees to steal. If someone buys two burgers for $2.50 each, that is $5 without tax. It is more difficult for employees to calculate the correct amount when amounts aren't rounded which makes it harder to steal.


@benyust2: Making it harder for employees to steal is an interesting angle I haven't heard of before.


Having worked in a related field (not a fast food joint, but an F&B based business) I can tell you from experience that more often than not the tax is rolled into the purchase price. In a similar vein to the making it harder to steal aspect is the ease of accounting and cutting down on storage space for "change".

Where I worked everything was in .25 increments, and as such we NEVER got pennies, nickles, or dimes from the bank when getting our change. That cut down at least 3 boxes in the safe, and judging by the amount of quarters we would keep on hand (~10-15 boxes at any one point) it would cut down on a quite a bit more than 3. We also were a very high volume business so the storage space in our safe was at a premium since we kept around $30,000 cash on hand to make drawers and such on top of having to store nightly deposits til the morning when they would be picked up. It was fun over a long weekend when we would have upwards of $75,000 in the safe.


I have not been to any restaurant or fastfood type place where I live that has this claim of no tax to the purchaser. Sounds like a good gimmick to get people in the door.


What's worse is that there are places that have signs that say "CASH ONLY", charge $4.99 (or anything of the sort) and, to make it worse, that price tag isn't post-tax.

Is there a word for this? Or is it just called "post-tax prices"?