Sales tax

You know what stinks? Sales tax. Sure, I know that it's used for good things--schools, roads, government. I know that it's necessary. I know that we're fortunate not to have an income tax in Tennessee. Plus, I know that our price of living is pretty low in comparison to other places. Check out this Huffington Post link. It has the 10 U.S. states with the most sales tax (current as of July 2011.) Guess who is # 1? Hint # 1: Starts with letter T and ends with letter e. Hint # 2: It's the state where I live.

My county's 9.75% sales tax rate adds up super fast! Check out this receipt. 

My subtotal (circled in blue) was $0.15. YES! The original cost of those items before coupons was $24.45 + tax, so that was quite the savings. Probably one of my best transactions ever. 

Now look at the sales tax (circled in orange). I paid $1.93 in sales tax on non-food items and $0.12 in tax on my food items. That's $2.05 in sales tax. Not bad for over $24.00 worth of merchandise. It's just a bummer seeing that 93% of my total out-of-pocket was sales tax.  

In most cases, you still have to pay sales tax, even when items are completely free. There's even a blurb in the fine print of most coupons that states consumer pays sales tax. 

A little bit of sales tax is no big deal, but when you're buying a LOT of items, it can add up. Last week's shopping trip cost me a total of $48.97 out-of-pocket. Only $27.79 of that was the cost of actual merchandise. That means I paid $21.18 in tax. That's 43% of my total in sales tax alone. The original retail for all my items was $238.53. I saved 81% INCLUDING sales tax or 88% WITHOUT sales tax. See how sales tax can really put a damper on your savings?

I know sales tax is necessary. I also know I shouldn't complain when I'm saving so much. If an item costs $2.00 and I have a $2.00 coupon, I still pay about $0.20 for sales tax. However, I once got two bottles of soap at K-Mart for free. They were $1.00 each and I had store coupons for $1.00 off. When the cashier scanned the coupons, it took off tax and everything. My guess is because it was a STORE coupon and not a MANUFACTURER coupon. I've also gotten drinks or food items at restaurants for completely free. For example, Dunkin Donuts will sometimes send coupons for a free coffee or whatever. If that's all I order, I don't have to spend a dime. Those instances are rare exceptions, though.

Is anything I get completely free? Not usually. That's another reason not to go overboard when purchasing items.