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Bill to ban hidden fees in California signed into law

oag.ca.gov

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Re: Bill to ban hidden fees in California signed into law

#171

Post by lpolovets »

kelnos wrote: post #129
lpolovets wrote: post #96

Earlier quoted context omitted.

I hear you, but the press release explicitly said that the goal of the bill is to prevent companies from attracting customers with a misleadingly low price and then charging a higher price. How are government fees and taxes -- especially industry-specific government fees that consumers may not be aware of -- not the exact thing that this bill stands against? If anything, this just encourages lobbying and corruption.…

Because government taxes and fees are a constant rate (given a particular good and location, anyway). If I'm price-comparing hotels, and I see one that's $100/night, and another that's $75/night, I know that the cost may be higher due to taxes, but it will be higher by the exact same percentage for both of the hotels. But if I go and book a room at the $75/night hotel, show up, and find that they're hitting me with a…

> If I'm price-comparing hotels, and I see one that's $100/night, and another that's $75/night, I know that the cost may be higher due to taxes, but it will be higher by the exact same percentage for both of the hotels.

1) IMHO this doesn't help. If I don't know what the taxes are, then knowing that they will be similarly high on either transaction doesn't help me with budgeting. Just like it's hard to know if a $75/night hotel is within my budget without knowing the size of its resort fee, it's also hard to know if it's within my budget without knowing if the tax on it is 8% or 18%.

2) FWIW this varies by county, so it's easy to have two hotels that are a mile apart but with different tax rates. To pick a random state, here is an old table of hotel taxes in Florida by county: https://www.floridasalestax.com/florida-tax-law-blog/2015/ja.... These taxes vary from 7% to 13%, so if you're picking hotels next to a county border, the difference can be noticeable.

Re: Bill to ban hidden fees in California signed into law

#172

Post by jessriedel »

sowbug wrote: post #68
jessriedel wrote: post #41

Earlier quoted context omitted.

Sales tax is paid by the consumer? The consumer mails in a check for the sales tax to the government?

Sales tax is charged only once for a retail good, not for the sales of wholesale goods that led to the retail sale. Otherwise the store that sold you a thing would itself have also had to pay 10% on that thing, as would the factory that bought the raw materials to make the thing, etc.

I see, "sales tax only applies to consumer purchases" would have been clearer.

Re: Bill to ban hidden fees in California signed into law

#173

Post by petesergeant »

musicale wrote: post #22

Looks like Ticketmaster, AT&T, Comcast Xfinity, Hotels with mandatory "resort fees", airlines, banks, car dealerships and rental agencies, realtors, landlords, etc. may have to make some changes. Deceptive pricing is extremely annoying, as are stealth price increases.

I’d like to see IATA set some standards for airfares that mean you can easily search like-for-like knowing you’ll want to be able to choose your seat and have a bag. Google Flights do an OK but not perfect job at this

Re: Bill to ban hidden fees in California signed into law

#175

Post by petesergeant »

nodesocket wrote: post #43

Laws like this aren't going to make services and products any cheaper. They'll just shift around and hide the fees into the core price. Sure, that's better I suppose, but end of the day still costs the same amount. Not convinced at all this is a area policy makers should be focusing on.

I think this is easy to dismiss as a concern by simply reversing it: why do you think companies hide these fees?

Hard to come up with any answer other than “to mislead consumers”

Re: Bill to ban hidden fees in California signed into law

#176

Post by heimidal »

Doctor_Fegg wrote: post #47
xmprt wrote: post #31

Earlier quoted context omitted.

Taxes are set at a multiple levels (federal, state, district, and city) so it's pretty much impossible to show the post tax price on the label. Hidden fees are a completely different issue.

I never understand this argument at all. Your shops have computers with label printers, right? At the Co-op supermarket in our little UK town (population 3000) they’ve even just replaced the shelf price tickets with tiny colour displays.

AFAIK (I'm American), the UK has a VAT rate for any good a consumer might find in a shop: 20%, 5%, and 0%, depending on product type. Because this rate is country-wide, the manufacturer can include VAT in their RRP. For example, if I go to the Sony website, a PS5 is £479.99 incl. VAT. If I go to the Amazon UK site, it's £466, or 3% off, incl. VAT.

If we locate the same product on the Amazon US site, it's $499.99 before tax. Amazon has two choices: show their price before tax or require shipping information from the user to see a price at all. (An estimated geolocation is not precise enough to determine a price.) For most consumers, I suspect seeing a pre-tax price upfront is better than having to provide personal information to see a price at all.

That explains online sales, but let's address brick and mortar retail. Imagine you go to Best Buy to comparison shop against Amazon and the price says $550 including tax. Is tax on this item in this location 10%? Or is it 5% but Best Buy's base price is higher than MSRP? It's up to me to find out the local tax rate and do the math. Let's say they agree to price-match Amazon; the clerk will need a function on the register to input a pre-tax price to facilitate this.

So, given this complexity and disparity, US manufacturers list MSRP without tax. Retailers display pre-tax prices for marketing and competitive reasons, generally never exceeding MSRP. Customers have come to expect this nationwide, so changing now would be challenging. (There are other good reasons to stick with pre-tax, too. In grocery stores, for example, pre-tax prices are very useful for SNAP beneficiaries.)

Do I think it would be useful to display tax calculations on signage in-store? Absolutely, and for some goods in some states, they do. But without laws or customer demand, retailers have no incentive to put themselves at a competitive disadvantage.

Re: Bill to ban hidden fees in California signed into law

#177

Post by heimidal »

pbhjpbhj wrote: post #145
JumpCrisscross wrote: post #122

Earlier quoted context omitted.

> 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?

Tax depends on the location the item is shipped to.

Re: Bill to ban hidden fees in California signed into law

#178

Post by heimidal »

thfuran wrote: post #134
olliej wrote: post #67

Earlier quoted context omitted.

Yeah, so in the US that doesn't work. Most obviously for display, tv, or radio ads you cannot ensure correct taxes in the advertisement (this was a big eye opener when I first moved to the US). It also doesn't work for online sales, where the final price can depend on the final destination of the goods or service. e.g. the taxes cannot be displayed until you've been given a street level address. For me for example ev…

>Most obviously for display, tv, or radio ads you cannot ensure correct taxes in the advertisement. They really shouldn't be advertising false claims in the first place. >It also doesn't work for online sales, where the final price can depend on the final destination of the goods or service. e.g. the taxes cannot be displayed until you've been given a street level address. That one has an easy solution: Just ask for…

> They really shouldn't be advertising false claims in the first place.

Just to be clear, you're suggesting that all pricing be removed from all advertising nationwide. This would clearly be to the detriment of the consumer.

> That one has an easy solution: Just ask for the destination.

Again, this is to the customer's detriment. They have to provide their personal information just to see the price of any item on any website they visit? And that's somehow worse than having to mentally add a percentage to any price they see until checkout? You must be kidding.

Re: Bill to ban hidden fees in California signed into law

#179

Post by heimidal »

olliej wrote: post #136
shortcake27 wrote: post #105

Earlier quoted context omitted.

Almost every other country in the world has solved this problem. It’s always fascinating when Americans have problems other countries don’t have, and just throw their hands in air saying “welp nothing we can do about it”

That's because other countries aren't as aggressive about pushing governance down to a local level. For example: in most countries you include sales tax in your advertisement, because why wouldn't you? In the US there is no countrywide sales tax, there are some states with literally no sales tax, and then there are states with high sales tax to compensate for zero income tax (which is excitingly regressive taxation).…

> Core to this is that the US constitution explicitly enshrines federalism in the tenth amendment (the last part of the "bill of rights"), that explicitly limits the power of the federal government.

I think this is the part that non-Americans fail to understand; we have no central tax authority and that principle is enshrined in our Constitution. Like it or not, so long as the US exists in its current form, so too does our wildly disparate tax code.

Re: Bill to ban hidden fees in California signed into law

#180

Post by MagerValp »

ffgjgf1 wrote: post #143
boxed wrote: post #114

Earlier quoted context omitted.

Stockholm syndrome talking. Displaying THE PRICE on products is so amazingly basic that it's always mind blowing seeing Americans think this is a complicated question. It's not. If I have to pay 5 dollars at checkout THEN THE PRICE IS FIVE DOLLARS.

It might be somewhat complicated when every town has a different tax rate.

If they can calculate it at the cash register, they can most certainly calculate it when putting up price tags.
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