Call it a “tax-planation” — spelling out for your customers why the government has forced you to increase what you charge them. From a Wall Street Journal article:
In New York, the sale of whole bagels isn’t subject to sales tax. But the tax does apply to “sliced or prepared bagels (with cream cheese or other toppings),” according to the state Department of Taxation and Finance. And if the bagel is eaten in the store, even if it’s never been touched by a knife, it’s also taxed.
That was news to one New York bagel-store owner, who found out he was out of compliance with the policy this summer when the state audited his company.
Kenneth Greene, the owner of 33 Bruegger’s Bagel franchises throughout New York, says the state demanded that he start charging taxes on all bagels, except for those that remain intact and are consumed off premises, and forced him to pay a “significant” sum in taxes that the state estimated he owed.
Mr. Greene says the extra charge, about eight cents a bagel, depending on the local rate, filled his customers with boiling rage. “They felt we were nickel-and-diming them. They thought we were charging them to slice a bagel,” he said.
To clear things up, he posted signs at the cashier informing customers that it was Albany, not Bruegger’s, to blame. “We apologize for this change and share in your frustration on this additional tax,” the signs read.
When I lived in Europe, I always felt that one of the only reasons governments there could get away with value-added taxes (VATs) of 20 percent or more on retail purchases was that the tax was — by law, as I understand it — baked into the price listed on the price tag. When I moved back, it was jarring at first to have 8 percent tacked onto the price of a good at the cash register, even though I knew the sales tax in Atlanta was smaller than the VAT I was charged in Brussels.
Government imposes all sorts of direct and indirect taxes that are passed on almost invisibly to the price of goods. For example, requirements that certain waste doesn’t go into a landfill may result in a “disposal fee” buried in the fine print of your bill for a certain repair or installation service.
We’d be a lot more aware of how much “nickel-and-diming” government does to us every day if more businesses would follow Kenneth Greene’s example.