How does sales tax holiday change tax?
I believe you are confusing sales tax with income tax. The tax holidays in the US are only for sales tax. Consumers purchasing certain goods during the tax holiday do not have to pay sales tax like they normally would. Effectively the price is slightly lower during those days with the purpose of giving people an extra reason to shop at that time. During the tax holiday the stores make the exact same profit that they normally do, but they may experience a bump in sales simply because more people will shop during that time. Income tax for both consumers and the businesses is not affected by this. Although New York state was the first state to implement a tax holiday 20 years ago, they no longer have one today, though they do have certain goods which have a lower tax rate year round.
Timing differences would still all come out in the wash. Might reduce it one year but over a few years it's essentially the same. It's becoming harder to create situations where big timing differences can apply. And generally (although not in every case) companies are seeing the bad press associated with not paying taxes and are being relatively less aggressive than in the past.   There's a lot too it but I get annoyed by people saying companies only make donations to avoid tax. I've posted on it before and it's a silly view. I owned a restaurant for over 5 years. Sales tax was only collected on POST discount price, though every state that collects sales tax may have different laws regarding collection. For example, when a customer used a gift certificate, that did NOT reduce the amount that tax was collected on. Why? Because the restaurant at some point or another collected the full amount of the bill. "In most jurisdictions, both the goods (raw materials) and the service (class) are being ""sold"" to the customer, who is the end user and thus the sale is subject to sales tax. So, when your friend charges for the class, that $100 is subject to all applicable sales taxes for the jurisdiction and all parent jurisdictions (usually city, county and state). The teacher should not have to pay sales tax when they buy the flowers from the wholesaler; most jurisdictions charge sales tax on end-user purchases only. However, they are required to have some proof of sales tax exemption for the purchase, which normally comes part and parcel with the DBA or other business entity registration paperwork in most cities/states.  Wholesalers deal with non-end-user sales (exempt from sales tax) all the time, but your average Michael's or Hobby Lobby may not be able to deal with this and may have to charge your friend the sales tax at POS. Depending on the jurisdiction, if this happens, your friend may be able to reduce the amount the customer is paying that is subject to sales tax by the pre-tax value of the materials the customer has paid for, which your friend already paid the tax on." "Don't worry about it.  The State doesn't care about rounding error.  All you need to do is say ""We charge our prices with tax included"" - you know, like carnivals and movie theaters.   Then follow the procedures your state specifies for computing reportable tax.  Quite likely it wants your pre-tax sales total for the reporting period. To get that, total up your gross sales that you collected, and divide by (1 + tax rate).  Just like DJClayworth says, except do it on total sales instead of per-item.  If you need to do the split per-transaction for Quickbooks or something, that's annoying.  What Quickbooks says will be pennies off the method I describe above.  The state don't care as long as it's just pennies, or in their favor." "Imagine two restaurants. One has prices 15% higher than the other, and the owner pays this 15% to his wait staff in the form of higher wages. The other has lower prices, but the average customer gifts 15% to their waiter. Clearly, in the first restaurant, the 15% the wait staff receives is taxable income. It is traditional salary. What legitimate, economic justification is their for treating the second restaurant any differently? Imagine a grocery store in a small town that offered long-time customers a ""pay nothing"" option but made it clear that they'd be subject to social ostracism and no longer welcome in the store if they didn't gift 85% of the usual cost of the items. The customers would save on sales tax and the grocer would argue that all that money was gifts, not income. Of course this doesn't work. The IRS, and the laws, don't care very much about what you call things. They care about the underlying economic reality. If the money was part of the payment for the services rendered, regardless of how it was delivered, what the parties called it, or whether the obligation to pay was legal or social, it's still a payment for the service and it's still taxable. You would have to be able to argue to the IRS that it really was a gift and wasn't any form of payment for the service received. Otherwise, it's just a scheme to evade taxes." You should total the items first, to get $3.00, then add the tax, then round up/down accordingly.  Your two examples above don't offer this option, even though your second example arrives at the same result.  In your first example, a number of items taxed one at a time might result in many .006 results which would round to .01. A long enough list of items would result in an error of many cents depending how many items there are. Totaling first then applying tax results in your saving .004 or losing .005 cents maximum due to rounding.  See A Guide to Sales and Use Tax which is a document put out by the Massachusetts Dept of Revenue. In the chart for tax, it shows that $1.09 is taxed at five cents, but at 5%, it would be 5.45. So, at least for this state, I believe I correctly stated the rounding process. This would be no different than asking if you can live in one state and earn a paycheck, then move to another state with a lower tax rate before your tax bill is due so you can save on your taxes for that income. Answer -- No The tax on lottery winnings is based on the state where the lottery was held, because for legal purposes that's where the winnings are considered to have been earned for taxation purposes. Also, changing where you live after earning money does not change your tax liability at all.  You still owe the state where the money was earned the tax that is due. I hope this helps. Good luck! Maybe you missed this part  &gt;by going into a local retailer and forcing them to compete with something they cannot realistically compete against while turning any kind of a reasonable profit.  There won't be any local taxes to pay if the local business isn't around to sell anything to you. Typically, the discount is taxable at sale time But what about taxes?  When the company   buys the shares for you, you do not   owe any taxes. You are exercising your   rights under the ESPP. You have bought   some stock. So far so good. When you sell the stock, the discount   that you received when you bought the   stock is generally considered   additional compensation to you, so you   have to pay taxes on it as regular   income. Source: Turbotax.   Second source. Your pretax rate of return would be: 17% (100/85) In your scenario where the stock price is fixed at $100. Your tax rate would be your marginal rate.   If the stock stayed at 100, you would still be taxed as income on $15/share (the discount) and would receive no benefit for holding the stock one year. Assuming you are in the 25% tax bracket, your after tax rate of return would be 13% ((15*.75)+85)/85) I believe its relevant, because, depending on what you believe your view of what level of taxation is acceptable, if any, is affected.  Someone who believes in big govt will weigh the impact on individuals take home pay much less than someone who doesn't believe in big govt. All States have property tax, all States except 4 have sales tax, and business tax is federal but there are local costs of doing business such as various state required insurances and license and payroll taxes and unemployment insurance for the state etc.    What I was talking about is personal income tax there are 2 kinds federal that everyone pays then all the states except those I listed take another 4 or 5% give or take which stays in the state instead of being sent off to the feeding government.   From a business perspective if the going rate for paying your employees based on their role was say 100k annually. The employees take home pay would be taxed 5k in a state with income tax. That would mean Amazon would need to offer 5k more pay for an equal job vs an employer in another state. This is just one factor a company this huge would consider when moving. "I'll assume United States as the country; the answer may (probably does) vary somewhat if this is not correct.  Also, I preface this with the caveat that I am neither a lawyer nor an accountant.  However, this is my understanding: You must recognize the revenue at the time the credits are purchased (when money changes hands), and charge sales tax on the full amount at that time.  This is because the customer has pre-paid and purchased a service (i.e. the ""credits"", which are units of time available in the application).  This is clearly a complete transaction.  The use of the credits is irrelevant.  This is equivalent to a customer purchasing a box of widgets for future delivery; the payment is made and the widgets are available but have simply not been shipped (and therefore used).  This mirrors many online service providers (say, NetFlix) in business model.   This is different from the case in which a customer purchases a ""gift card"" or ""reloadable debit card"".  In this case, sales tax is NOT collected (because this is technically not a purchase).  Revenue is also not booked at this time.  Instead, the revenue is booked when the gift card's balance is used to pay for a good or service, and at that time the tax is collected (usually from the funds on the card).  To do otherwise would greatly complicate the tax basis (suppose the gift card is used in a different state or county, where sales tax is charged differently?  Suppose the gift card is used to purchase a tax-exempt item?)  For justification, see bankruptcy consideration of the two cases.  In the former, the customer has ""ownership"" of an asset (the credits), which cannot be taken from him (although it might be unusable).  In the latter, the holder of the debit card is technically an unsecured creditor of the company - and is last in line if the company's assets are liquidated for repayment.   Consider also the case where the cost of the ""credits"" is increased part-way through the year (say, from $10 per credit to $20 per credit) or if a discount promotion is applied (buy 5 credits, get one free).  The customer has a ""tangible"" item (one credit) which gets the same functionality regardless of price.  This would be different if instead of ""credits"" you instead maintain an ""account"" where the user deposited $1000 and was billed for usage; in this case you fall back to the ""gift card"" scenario (but usage is charged at the current rate) and revenue is booked when the usage is purchased; similarly, tax is collected on the purchase of the service.  For this model to work, the ""credit"" would likely have to be refundable, and could not expire (see gift cards, above), and must be usable on a variety of ""services"".  You may have particular responsibility in the handling of this ""deposit"" as well." You cannot deduct anything. Since you're actually moving, your tax home will move with you. You can only deduct the moving expenses (actual moving - packing, shipping, and hotels while you drive yourself there). The HST is a sales tax levied on most goods and services. It is important to realize that in both BC and Ontario, the new HST does not (in most cases) result in an increase in sales tax paid. For example, in Ontario the PST is 8% and when combined with the GST the sales tax is 13%. With the HST, the GST and PST are replaced by a single HST of 13% so the tax bill does not change. Some services that were previously not subject to PST (such as mutual fund service fees and labour) will now be subject to the HST. So some things will increase. Over time, this should not have a material impact on the consumer due to the way businesses remit GST/HST. In 2012, the standard deduction is $5950 for a single person.  Let's assume you are very charitable, and by coincidence you donate exactly $5950 to charity.  Everything that falls under itemized deductions would then be deductible.  So, if your property tax is $6000, in your example - Other adjustments come into play, including an exemption of $3850, I am just showing the effect of the property tax.  The bottom line is that deductions come off income, not off your tax bill. The saving from a deduction is $$ x your tax bracket.