Tax

I would imagine this question has been asked before but to do a search with "tax" as the search word brings up anything that has the word "tax" in it.  Any thought on collecting sales tax?  I have been to trucks/carts that add the tax in right away at purchase and others who don't.  I am guessing that the tax is part of the price.  Any thoughts on how to collect tax. 
I can see why the flat price because of the easy math and the less change making.  I would rather charge the flat price just because of the change making.  Can anyone give me some thoughts,pros,cons?  Thanks so much.
B.

I include it to keep the numbers round. My problem is I also have to include meals tax.Four percent in the city, 6% in the county. I also try to keep all transactions in dollors just to keep it even simpler. Gotta keep that line moving.

all my prices include tax.saves alot of hassle

Depends on the law in your state. If you are allowed to, its a heck of a lot easier to include the tax in the price. Here in Massachusetts it is illegal to do that (though I do see a lot of people breaking this law, which is bad news if you get caught).

Included in my priceing but the state just raised the sales tax too so I have to be sure it hasn't changed my prices or I need to suck it up. Damn governor digging into my pocket again.

If you have a 5% rate, just put on your menu......$4.76+.24 tax.

Can't do that in Mass. Tax has to be calculated on the entire order, not per item, and its 6.25% which means the tax on $10 does not equal twice the tax on $5 (the tax on $5 is 31 cents, the tax on $10 is 63 cents).

Depends on your staffing.  If you have a dedicated cashier, add tax.  I do not, so I include tax in the price.  The tax man in FL hits you with a higher effective sales tax rate if you choose this method.
 
 

If you're going to include sales tax in your selling price, it's easy enough to calculate at the end of the day (submitted for those new to having to do this):
 
My state, county, and city tax totals 9.25%.  Lets say I had $125.00 after the starting till is subtracted.
 
Simply take the $125.00 and divide by (in my case) by 1.0925.  This equals $114.42.  There's the actual sales.  Subtract it from the $125 and you've got your estimated tax to save out of it. 
 
 
I met a lady the other day that runs a popular snow cone stand.  She's been doing it for about 8 years and told me she didn't even know who to figure her daily tax.

just raise your price 10% and enjoy the difference
 

in my area, you must seperate the tax from the cost of item. ex if my dog is 4.25, total price is 4.51.  If I just charged 4.51 on my menu, then if tax people came to me, they would make me pay the tax on the menu, which would be double tax.  Just either charge it seperate or don't charge it. you could be setting yoruself up for headaches.

You need to check with the tax people in your state. We have included the sales tax in our menu prices in all the states we collected in (NC, NM, TX). In NM, my paperwork for sales taxes  uses the "backout" method that Diamond Dog used....
Gross Receipts (including tax)      $2000 Divide by
divided by Tax rate (plus 100)         106.875  (6.875%)
equals GROSS RECEIPTS WITHOUT TAX $1871.35
 
Then you can subtract your receipts sans tax from your gross receipts to get the sales tax you need to pay in.
 
 
 
You can also use the same method to determine your sales tax per item. For example, I use a spreadsheet that I can breakdown what it costs to put together a sandwich. This is how we figure out what each sandwich costs and all I have to do is keep the costs up to date and the spread sheets keeps everything broke down in to individual sandwiches. So for a new sandwich it's pretty simple to just add a new meat and/or bread. At the bottom I have a row for "estimated selling price" when I decide on my "menu price" I use the backout formula to determine what my actual selling price is and the amount of sales tax each item. We sold bottled water in TX and plain bottled water is exempt form sales taxes there. So we kept a tally sheet of our individual sandwich/soda sales for taxes.

THE WILD DOG


in my area, you must seperate the tax from the cost of item. ex if my dog is 4.25, total price is 4.51.  If I just charged 4.51 on my menu, then if tax people came to me, they would make me pay the tax on the menu, which would be double tax.  Just either charge it seperate or don't charge it. you could be setting yoruself up for headaches.

Don't understand why you can't charge $4.24 and collect $4.50. If there's a few pennys differance just pay it.

cant you just list prices on the left side, tax in the middle, and total on the right?
 
adjust the prices so the total column comes out even amount IE: .00, .25, .50, .75

Jcheese: your statement that "if there's a few pennys difference just pay it" is exactly why you can't, at least here in Massachusetts. The sales and meals tax, while charged, collected, and submitted by the selling business, is actually a tax levied on the consumer. So if you, as a business, pay any portion of the tax for your customer, that is (technically speaking) aiding and abetting tax evasion. Even if you pay the tax, your customer is evading that tax, and (in theory, not really in practice) you can both get in trouble for that.

In practice, things are never quite that black and white, but I've found its better to follow the rules when it comes to the tax man. Case in point: the supermarket I used to manage got a HUGE fine a few years ago for screwing up the way we charged meals tax. In Massachusetts, meals tax has to be charged on any prepared food intended to be eaten immediately by the consumer. As such, if the customer comes in and buys a loaf of bread, pound of ham, and package of cheese, those are considered groceries and are not taxed. But, if the same customer goes to the deli and orders a ham sandwich, that sandwich is considered prepared food and therefore is taxed.

Now, here's where it gets tricky, and where we got into trouble. If a customer walks in and buys a 20 oz. bottle of coke, its groceries and is not taxed. BUT, if they go to the deli, get a sandwich, and also buy a bottle of coke, the state considers that bottle of coke to be part of the meal, and therefore both the sandwich and the soda have to be taxed. We weren't taxing the soda, and we got a HUGE fine plus the state combed over sales records dating back years in order to determine how much tax we had failed to collect and charged us all that tax plus interest. It was messy.

So... better to be safe than sorry, and follow the tax code to the letter.

so the bottom line is ...correct me if Im wrong....its all what you tell them or claim.

This is something I have avoided thinking about seeing as how my truck is in the very very beginning stages of becoming a food truck.....I will have to get with my tax authority to find how how I need to charge and collect tax, I was just think of charging $7 or $9 for what ever the item is and not mentioning tax but just including it in the price that I charge is this what you mean by illegal?

It may not be legal in some states but others don't care if you include the tax in the price on your menu. I go a step further in my pricing. I price everything at 25, 50, 75 cents or an even dollar. I don't use penny's nickles or dimes. And I can't tell you how many customers have said they really appreciate it. Before I changed to that method, I used to find pennies in the parking lot all the time. And some nickles and dimes. Young people have no respect for smaller change it's amazing. Now we make change much faster and a heck of a lot more customers pay with exact change. It works great.
Jack

We do the same thing as the good Dr.- rounded to the nearest quarter.
 
Funny thing is that people pay with pennies, nickels, and dimes sometimes.