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Opinions on pricing / inclusion of sales tax in advance of sale

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  • Opinions on pricing / inclusion of sales tax in advance of sale

    I wanted to sound out the forum on an issue I keep going back and forth on in my business plan sales worksheets...

    Here in Maryland, we have 9% sales tax on alcohol and 6% on merchandise. When I starting formulating my plan, I decided to assume "round numbers" in my pricing scheme for the sake of simplicity for myself and my customers. So, that $5 pint was really only about $4.59 in my pocket when all said and done.

    However, the more I look at this, and also think about it relative to the restaurant industry, it's not at all uncommon for the sales tax to be added at the end. But, at the same time, I really don't want to alienate people by saying $5 pints and then having tasting room visitors be put off by a bill total of $5.45.

    I'm so so much fixated on the $5 itself instead of $4 or $6, it's more the principle of the thing and how taking this approach may give me heartburn elsewhere. Perhaps not separating each out in POS reports will create insanity in the bookkeeping or at tax time. It would be nice to simplify the cash drawer in the tap room, though.

    I'd love to hear people's thoughts about the issue... I'm still in planning and want to get this right. Thanks in advance.
    Kevin Shertz
    Chester River Brewing Company
    Chestertown, MD

  • #2
    The pub that I work at, we charge price say $5 and that includes the tax for beer only. All of the food and other items have the sales tax added on.

    Jim Lieb
    Brewer
    RRBC

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    • #3
      We sell ours for 5 and include the taxes. Makes everything easier, and people seem to appreciate that they can just slam down a fiver for a pint instead of screwing around with weird change.

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      • #4
        We include tax in our prices. Making weird change just slows everything down, so all prices are rounded to the nearest quarter. Death to pennies!
        Russell Everett
        Co-Founder / Head Brewer
        Bainbridge Island Brewing
        Bainbridge Island, WA

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        • #5
          Tips

          In TN restaurants are required to include the tax in the price of alcoholic beverages on the menu. I agree that you want it as simple as possible so I would opt for including the tax as well (but not for merch or food as discussed above). In deciding what your price will be don't forget that a little change will help your bartenders out tip wise. While plunking down a five is easy and convenient for customers it might lead to lower tips for staff since the five is a round bill and you have to get out another whole bill, even if it is just a one, to give a tip. Most customers will take care of your folks but you do want to make that part as easy as making the payment.

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          • #6
            Originally posted by gungadin View Post
            While plunking down a five is easy and convenient for customers it might lead to lower tips for staff since the five is a round bill and you have to get out another whole bill, even if it is just a one, to give a tip. Most customers will take care of your folks but you do want to make that part as easy as making the payment.
            I was thinking the same thing. A $4.75 beer would practically guarantee the bartender a steady stream of quarters.

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