$10 Off coupon & IN Law & Taxes

[jedi]

So today I go to Costco an buy an item (Turbo Tax) that cost $79.99 and I have a $10 off coupon for it. I go and pay and here is what my receipt shows.

Item 1 79.99 A
Coupon 10.00 -

SUBTOTAL 69.99
A 7% TAX 5.60

TOTAL 75.59
----

Doing the math you can come up with 2 final totals.

79.99 - 10 = 69.99 * 1.07 (tax) = 74.89
or
79.99 * 1.07 = 85.59 - 10 (coupon) = 75.59

Now on the back of the coupon it says that some STATE & LOCAL laws require that the coupon be applied AFTER the taxes imposed on the full amount.

So does IN have this law?
Also it is not deceiving that I'm not really getting $10 off using the 2nd method but actually $9.30?




Jedi

 

[stephen87]

Order of operations. Multiplication comes before addition, therefore IN did it the correct way, unfortunately costing you and extra 70 cents.

 

[Double T]

The formula should be (79-10)*1.07

 

[PeaShooter]

I can't think of a coupon being applied in this way anywhere else that I have shopped. Maybe it is in their computers that way and needs to be changed. I would bring it to the managers attention and make him prove that it is Indiana law to apply them that way.

 

[jedi]

Order of operations. Multiplication comes before addition, therefore IN did it the correct way, unfortunately costing you and extra 70 cents.

Yes math wise the order of operation would be correct (ie. higher price).
But this has been the only place where I have seen it occur that way (ie. using the correct order of operations math). Elsewhere it's always been as double T shows.

The formula should be (79-10)*1.07

I can't think of a coupon being applied in this way anywhere else that I have shopped. Maybe it is in their computers that way and needs to be changed. I would bring it to the managers attention and make him prove that it is Indiana law to apply them that way.

Looks like I will have to go back this weekend and find out about this. Yes .70 is not a big deal to some but it is to me. Not that it's .70 cents but more that its not REALLY $10 OFF. And if that is the case then it's a misleading marketing practice.

If the .70 cents are really going to IN as taxes so be it but I have the funny feeling it's .70 to Costsco "masked" as taxes.

Jedi

 

[jd42k]

I believe Indiana is before taxes are applied...
I just has a similar experience where I had a $10 off coupon for a purchase of $50 or more. Well, the purchase I wanted to make was $49.99 so the person at the register charged me $59.99 for the item and gave me a $20 coupon so the net price was $39.99 + tax. After I got home I got to thinking why couldn't the person at the register just give me the $20 coupon off the $49.99?

 

[$mooth]

Indiana is the only place I've lived that does it this way. Caught my attention when I first moved here (at Costco as well, but a $200 discount, but I see it at other stores as well). Seems illogical to me, the tax should be on the actual transaction price. A coupon is not a form of payment, it's a sale that I have to prove. That's why the cash value is often 1/32 of 1cent.