"I just can't for the life of me make up my mind on whether we should include sales tax in the price or add it on after the fact." - Reddit Source: u/officerzan
This topic crops up frequently on r/foodtrucks and there seems to be a strong sentiment against including sales tax up front. Below are some of the reasons given by the Reddit food truck community.
1) Loss of business to competitors
Example: You have a $10 item on your menu and a neighbor truck has a similar dish for $10. You decide to raise your price to cover taxes - your menu item is now $11 but your neighbors is still $10.
The customer just sees that your dish is more expensive without the knowledge you included tax and goes with your seemingly cheaper competitor. You just lost 7.75-12% profit that the customer expected to pay.
"If you include the tax in your prices you will lose profit."
Source: u/PsychologyBubbly9948
2) Complicated book keeping
Example: If you implement delivery, not only could you end up paying taxes based on whatever location your commissary is in, but you may also pay taxes based on where your customers are.
"Record keeping is way more complicated when you include it at the top."
Source: u/PsychologyBubbly9948
3) Unnecessary merchant fees
Example: Some merchants do not charge you fees on taxes, so if you do not have a tax line break-out, you will pay fees on the whole amount (with these merchants).
"Margins have enough variables, tax shouldn't be one of them."
Source: u/officerzan
4) Customers expect tax is not include in the menu price
"(Everyone EXPECTS tax). Don’t cut your profits before you even make it!"
Source: u/PsychologyBubbly9948
But on the other side of the argument.....
"A lot of corn fed anti-establishment types that would rather pay $4 than $3.50 + tax because they perceive tax as evil and math is hard."
Source: u/officerzan
This seems like too much of a one sided argument, so if you have any pros you'd like to add, pop them in the comments below - we'd love to discuss further!
