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Pricing and Tax
Disciplines > Marketing > Pricing > Pricing and Tax Description | Example | Discussion | See also
DescriptionVery often, prices you charge have and additional tax element you must charge, and then pass the tax to the government. A question in pricing is whether you should show your price and tax separately, or whether you should just show the total amount that customers must pay. There is no one right way to do this, so do consider the discussions below, including expected norms and how the customer may feel (positively and negatively) about you and your products. You can also show a total price with a note to indicate 'tax included'. Sometimes retailers will suggest that a sale item is 'tax free' or 'we pay the tax' as they reduce the total price by the tax amount. Of course they still have to pay government sales tax on the reduced amount. ExampleA business that sells to other businesses prices everything without tax and not even mentioning it as this is the norm within the industry. Tax is only added in the final invoice, along with delivery charges. A retailer prices goods with a single large price amount, followed by smaller text in brackets indicating the included tax amount. For example '$345 (including $45 tax)'. DiscussionReasons to put the tax separately:
Reasons to offer a single 'all in' price that includes tax:
See alsoCustomer Price Thinking, Primacy Effect
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