Is This Legal Or Not Sam's Club Sales Tax

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  #1  
Old 02-13-2015, 07:16 PM
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Default TAX EXPERTS Is This Legal Or Not Sam's Club Sales Tax

Not a big issue on this one small item but it could make a big difference on a larger item(s).

If you go to Sams and buy Turbotax software for $54.98 which originally was priced at $69.98, do you pay sales tax on the actual amount of your purchase of $54.98 or the original price amount of $69.98?

A supervisor and a manager insisted today you must pay sales tax on the original price of $69.98 and not the amount paid for the purchase which was $54.98. Their explanation was that it was an instant savings and therefore you pay the sales tax on the original price.
They also insisted Sam's does this at all their stores. There are no signs anywhere indicating tax will be charged on the higher amount.

If you buy a $1000.00 TV for $800.00 with an instant savings of $200 would you still pay sales tax on the original price of $1000.00? Tax would be $70.00 instead of $56.00 which would be well over 7% of the amount actually paid of $800.00..

They may be correct but wondered if there are any tax experts that would know for sure?

Thanks
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Old 02-13-2015, 07:35 PM
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Perhaps the "Instant Savings" for TT is really a "couponless" coupon, in which Sam's will get reimbursed by TT for the amount of the instant savings. This results in a taxable transaction amount equal to the original price.

Don

PS I am not a tax expert…
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  #3  
Old 02-13-2015, 07:39 PM
rhood rhood is offline
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If you buy a $1000 tv for $800, it isn't a $1000 tv anymore, it is an $800 tv. You are taxed on what you spend.
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Old 02-13-2015, 07:58 PM
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Quote:
Originally Posted by KeepingItReal View Post
Not a big issue on this one small item but it could make a big difference on a larger item(s).

If you go to Sams and buy Turbotax software for $54.98 which originally was priced at $69.98, do you pay sales tax on the actual amount of your purchase of $54.98 or the original price amount of $69.98?

A supervisor and a manager insisted today you must pay sales tax on the original price of $69.98 and not the amount paid for the purchase which was $54.98. Their explanation was that it was an instant savings and therefore you pay the sales tax on the original price.
They also insisted Sam's does this at all their stores. There are no signs anywhere indicating tax will be charged on the higher amount.

If you buy a $1000.00 TV for $800.00 with an instant savings of $200 would you still pay sales tax on the original price of $1000.00? Tax would be $70.00 instead of $56.00 which would be well over 7% of the amount actually paid of $800.00..

They may be correct but wondered if there are any tax experts that would know for sure?

Thanks
I hope this is incorrect or I will never buy at Sams again. I will be checking my receipts more closely going forward.
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  #5  
Old 02-13-2015, 08:03 PM
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You may want to call ....
Sam's Club Corporate Office Headquarters HQ
Wal-mart Stores Inc.
Address:
702 Southwest 8th Street
Bentonville, AR 72716
Corporate Phone Number: 1-479-273-4000
They would definitely be able to answer your question.
  #6  
Old 02-13-2015, 09:12 PM
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This is likely a state sales tax regulation that differentiates between a negotiated sales price (think car buying) and a sale involving a gift card/coupon. In the former, sales tax is paid on the negotiated price. In the latter, sales tax is computed before the gift card/coupon is applied. Again, I doubt this is a Sams Club policy.
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Old 02-13-2015, 09:32 PM
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"common sense"...you get taxed on how much you spent...not on the full retail of the article...ie: if you buy a new car and the original asking price is X and they only charge you Y then you pay the taxes on Y...not X

Unreal....
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Old 02-14-2015, 06:04 AM
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A call to FL sales tax is needed to clarifiy
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Old 02-14-2015, 07:20 AM
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Something sounds "fishy" here. I kind of agree with people who say you pay taxes on the price you settle on only. But, I've been wrong before. hehe
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Old 02-14-2015, 07:38 AM
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Some states require tax be paid on the original price of the item, not the instant rebate price. Costco does the same thing as Sam's.
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Old 02-14-2015, 07:59 AM
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I had a recent experience at CVS on a much smaller scale. I looked up Florida sales tax law and found the following simple explanation.

If you get a negotiated price, you pay the tax on that price. If you get a store coupon reducing the price ie 10% discount , you pay tax on the reduced amount. If you get a reduced price due to a manufacturers coupon, you pay tax on the ORIGINAL price.

I am not an expert on this issue but that is the example I found on the net.
  #12  
Old 02-14-2015, 08:15 AM
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Quote:
Originally Posted by KeepingItReal View Post
Not a big issue on this one small item but it could make a big difference on a larger item(s).

If you go to Sams and buy Turbotax software for $54.98 which originally was priced at $69.98, do you pay sales tax on the actual amount of your purchase of $54.98 or the original price amount of $69.98?

A supervisor and a manager insisted today you must pay sales tax on the original price of $69.98 and not the amount paid for the purchase which was $54.98. Their explanation was that it was an instant savings and therefore you pay the sales tax on the original price.
They also insisted Sam's does this at all their stores. There are no signs anywhere indicating tax will be charged on the higher amount.

If you buy a $1000.00 TV for $800.00 with an instant savings of $200 would you still pay sales tax on the original price of $1000.00? Tax would be $70.00 instead of $56.00 which would be well over 7% of the amount actually paid of $800.00..

They may be correct but wondered if there are any tax experts that would know for sure?

Thanks
You know, that just isn't right. I would call corporate in Arkansas. Seems wrong completely. Somebody has either screwed up, or the computer hasn't been updated. I doubt very much it is Sam's Club because of transparency someone would have caught them, and they are too big to try silly shenanigans.

If you call corporate, please let us know.
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  #13  
Old 02-14-2015, 08:35 AM
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You received an Instant Savings Cost. This is like a rebate not a discount. Think of it as you bought the product at regular cost and receive a form to fill in and mail to the company to get fifteen dollars back. Instead Sams gave you the 15 back right away. Of course you had to pay tax on the amount of your pre-rebate purchase. What exactly, if you still have it, does your receipt say?

Here is the operative language from Sam's Club website

" Instant Savings items are subject to availability and dates. Select Instant Savings are available online. For Click 'n' Pull purchases, Instant Savings can be redeemed at point of sale at the club with the primary membership card. State and local laws may require sales tax to be charged on the pre-discounted price of an item with an Instant Savings offer"

The mechanism here is that Sams is receiving not just the 55 dollars you paid, as they are submitting the 15 rebate for you to the Turbo tax company which remits the 15 to Sams. Thus the sale is really the 55 Sams got from you and the 15 from T Tax, or the full listed price of 70 dollars. So Sam's needs to collect sales tax on the 70 it gets.

If however, there was no rebate coming from T.Tax and Sams was only getting the 55 from you, then the tax would be on 55 dollars. If you ever use a manufacturer's coupon (not a store coupon) the tax should be on the pre-coupon rate.
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Old 02-14-2015, 08:49 AM
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Default tax

If you will notice, say at Walmart, when you have coupons they will register up the full price. The tax will be calculated on that total, they will then subtract the coupons.
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Old 02-14-2015, 08:54 AM
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These tax issues are typically guided by the State. I know in GA (where I previously conducted business) FREE is not always FREE either! In GA If a business sells a product Buy one Get One FREE they have the option to charge tax on the amount of the 2 items and pass along the taxes to the consumer OR absorb the Tax and collect tax on ONLY the purchase amount. I found businesses were split about 50 / 50 on which way they chose to conduct their Tax policy. Either way, the Business has to pay the Tax to the state on BOTH the items therefore many businesses collect tax on the FULL VALUE OF THE ITEMS PURCHASED at regular retail price! I am unsure of what Florida Tax guidance states but it does vary state to state.
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