From: fielden@spot.Colorado.EDU (j. a. fielden)
Subject: Re: Sales tax - 3.3 kept by merchant (not)
Organization: University of Colorado, Boulder
Date: Mon, 9 Nov 1992 20:56:44 GMT

In article <1992Nov5.173159@eklektix.com> rcd@raven.eklektix.com (Dick Dunn) writes:
>fielden@spot.Colorado.EDU (j. a. fielden) writes:
>> I read this week that out of the sales tax collected by merchants
>>they get to keep 3.3% of it. When the sales tax was instituted they
>>were allowed to keep 5% as an incentive to collect it and it was lowered
>>to 3.3 in 1964(I think). 
>
>Just as an example, the numbers for Boulder city and the state are each
>1.5% *of*the*tax* *collected*.  I don't have the numbers for RTD or our
>county, but the city and state taxes are most of the sales tax anyway.
>
>City tax (last form we could find) is 2.86%; state tax (whew!) is 3%.  The
>merchant gets 1.5% of 5.86%, or 0.0879% of actual purchase amount.
>
>>Does anyone else think that this is ridiculous that they are allowed to
>>retain so much?...
>
>88 cents retained per thousand dollars of purchase amount???  I think your
>argument is ridiculous.  There are very few businesses where the purchase
>amounts are large enough that this begins to pay for the bookkeeping.
>
>[Surely you didn't think the merchants got 3.3% of the total purchase
>amount???  Or did you think that merchants outside the urban areas, where
>the total sales tax is only 3%, were collecting taxes, keeping them all,
>*and* getting paid 0.3% by the state?  Nah...]
>-- 
>Dick Dunn    rcd@raven.eklektix.com   -or-   raven!rcd    Boulder, Colorado
>	...Simpler is better.

 My understanding is that for every dollar of SALES TAX collected.
i.e. If they collect 7.3 cents per dollar sales tax then when
they have sold 14 dollars of merchandise they have collected 
one dollar and 02.2cents of tax.-- they keep 3.3 cents(plus a 1/100 or two)
of it. That means for every $100 dollars of TAX collected they keep $3.30
and for every thousand of TAX COLLECTED they keep $33.00.  My point is -
Colorado is one of the few states that allows merchants to KEEP ANY OF
THE TAX THEY COLLECT and as far as I can find out(which hasn't been much)
those states only allow them to keep 1.5%(I don't vouch for this figure
since it is only hearsay).  No where did I say it was out of the purchase 
price. My argument is that collecting tax is part of the cost of doing 
business which can be covered in pricing. Merchants pretty much have
a fixed cost associated with collecting the tax(ie. it's collected and totalled
and payment sent off, I can't think of a way the cost of collecting increases
as the amount of tax collected increases).  

I was also bothered by the fact that if admendment 6 had passed merchants
would have gotten 3% of the penny increase when their cost of collection 
didn't increase. And given that most merchants have electronic cash registers
with programmed sales tax changing the amount of tax charged is not a 
big deal(I worked retail and it took 5 minutes to do with the manual and me
knowing next to nothing about the register).  


There was an article in the Denver Post on this on or about election day
last week. 

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