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by bcrosby95 984 days ago
It's not really a problem in brick and mortar stores. It's a problem in online stores because you can't necessarily give someone the right price with taxes until you have their address.

And this problem is harder than some might think. I knew someone who lived on a street that was a "dividing line" for this stuff: same zip code, same city, but one side had a 9% sales tax, the other side had around 7%. We tested a lot of online stores and none of them got it right. Including Amazon.

3 comments

How do they know how much tax to charge you when you buy?

In that same way they know what price to show you.

> How do they know how much tax to charge you when you buy?

Did you miss the part about it being calculated in the cart? That’s after you’ve made the decision to purchase, a decision which presumably included the price. I would refuse to give every vendor my address just to see a price.

>I would absolutely refuse to give every vendor my address just to see a price.

How does it work now? If you don't give your address, but the price depends on your address, how does the store know how much to charge you? If you don't have to give your ID then surely you just say you're from the lowest tax location?

> If you don't give your address, but the price depends on your address, how does the store know how much to charge you?

I don’t want to give my address to see the price. After I’ve decided to buy the thing, I’m okay disclosing who I am. But simply to see the price?

Also, if I’m a retailer and people are giving me their address before I price them, on what planet am I not going to use that to help me price discriminate?

You don't need the address, you just need to know in which city they live, AT MOST.

Taxes don't change every street.

> Taxes don't change every street

Ha. Oh boy. I remember when an engineer at a POS system start-up said something similar. It's like when someone decides they're going to roll their own time zone calculation.

In case you're curious, yes, two people in the same city can be in different counties, different school districts, different water boards, et cetera. Each of those typically has taxing authority. And this is before we get into crap like urban enterprise zones [1].

[1] https://en.wikipedia.org/wiki/Category:New_Jersey_Urban_Ente...

They might. Cities can, in most states, cross county borders. Both counties and cities can have their own taxes.

I've seen cases where a neighborhood was split. Two near-identical houses, but one had less than half the property tax of the one next to it.

What would the ID change?

It only really matters where the goods are delivered.

Tax depends on the location the item is shipped to.
So if you buy groceries and then live in a different tax area, you have a customs office to pay the extra tax?
No. Sales tax in the US is determined based on the location where the customer takes possession of the merchandise.
Most online stores immediately ask for your location (or know a good estimate via IP or ad tracking) anyways. Or ask you to "search for the nearest location." So there is already a lot of data they could use.
I've never seen an online store ask for my address before I'm in the checkout process. The only exception is when I check to see if an item is in-stock at my local store or if one-day shipping is available.

The location detectors are notoriously bad. I'm either placed in some town in Washington (multiple states from me) or somewhere else that does have different local tax than my part of my state.

It's also just not as concerning from a competition or perspective, since taxes apply to all competitors, and none of them have the freedom to set those rates.