|No Sales Tax-do you promote this benefit on your site?|
For those that can legally offer it.
It seems like a no-brainer that sites who can offer "No Sales Tax" should promote this fact, and yet I see many sites don't mention it-what gives?
This should be a David Letterman Top 10.
Some do not collect nor report?
I know at least one eBay seller I buy from that does not charge state tax (we are in same state).
Maybe it is still a hobby. :)
I have entities in 5 different states..warehouses, b&m branches, etc. If I promote tax-exempt sales in 45 states I run the risk of alienating potential customers in 5 very profitable states. Putting up a notice about my lack of sales tax would mean I also put up a notice that says, "Residents of the following states will be pay an extra XX% over residents of the remaining 45 states. If you wish to file false paperwork for tax exempt status and cause hours of hassle, please fax us at...call to try and barter over price for the extra XX% you feel you should not pay; please attempt to cut into my profit margin." Get my drift? Easier, and through A/B split testing, more profitable for me to let sleeping dogs lie. They all arrive believing they will not pay sales tax; when they see they must (as no one reads my Policies and Terms...EVER)pay sales tax during check-out, they realize they would have to do the same thing at the B&M store in town but now don't have to drive and find the exact item they are ready to purchase. My bigger ticket items prompt calls to find where I exist, where it ships from, etc anyway.
|It seems like a no-brainer that sites who can offer "No Sales Tax" should promote this fact, and yet I see many sites don't mention it-what gives? |
I wondered the same thing.
We only collect in our own state. Therefore, for 97% of our customers the sales tax aspect is a benefit. Yet WE don't mention that. I guess many sites don't want to thumb their noses at tax regulators.
Of all our 200 competitors, only one ballyhoos "No Sales Tax." It is in one of the 5 or 6 states without sales tax. I don't think it does very high volume.
Small sites tend to copy the big boys and many large retailers are voluntarily paying sales tax.
Wouldn't it be an interesting experiment to prominently display "No Sales Tax Today!" and see how that affects sales?
Fascinating question: Do shoppers in high tax states shop online more than those in zero or low tax states? You would think a 7-8% savings would be a huge incentive to go online. But my own experience shows no correlation. When that question arose here several years ago, others agreed with my findings.
Shoppers. for some reason. ignore sales taxes. (is that true with high ticket items?)
It can depend on the state you have incorporated in, and the states you have a physical presence in, but in general you only collect sales tax with your in-state customers.
If you are worried about having to explain that you will charge sales tax to the in state business, why not just not even say anything, and credit the sales tax amount back to the customer -- transparently?
If the product is $100, sell it at $100, charge the tax, and add the credit back amount of the sales tax on the invoice. Sure, it will cut into your profits by 2x the tax, but only for in-state business.
Also, it would seem better to say 'Save an extra 7% with our no sales tax', over just 'No sales tax'. It would be interesting to see someone doing a/b testing on displaying this message and not.
[edited by: TowerOfPower at 6:16 pm (utc) on Aug. 9, 2008]