One of the things I love about shopping in Europe is that when you spend over a certain amount (it depends on the retailer), you are eligible to get the VAT (Value Added Tax) back when you leave the European Union. All you gotta do is ask one of those tax-free forms, present them to customs to get it stamped at the airport and voila, you either get cash or a credit back to your payment card. Taxes in Europe, as you know, are quite high, especially in Scandinavian countries. But what makes it fascinating is that what you see on the price tags in Europe, similar to the Philippines — at least what at shops, is what you’ll be charged at the counter. No ifs, no buts, no nothing. Unlike in America (India is also the same) where sales taxes are added separately. So depending on the US state where you’re shopping at, that $550 shoe suddenly turns into $7,499.99 in a snap of a finger. Don’t even get me started when eating out at restaurants. There you are, amazed how all the prices are as delicious as what’s being served on the menu but when the bill arrives, factor in sales tax and tip/gratuities, that meal for two is like a meal for ten back home. OK, I’m exaggerating, but still.
Not too long ago, I spoke to a friend who lives in Los Angeles. She, too, hates these pesky sales taxes. She told me that one way to bypass these sales taxes is to buy something from out of state, like New York — and have it shipped home, in California.
Here’s what I don’t understand. And please forgive my ignorance. Why are we, foreign tourists, subject to sales taxation, when we take our purchases out of the country whereas people who live/buy out of state, get their sales tax waived? Also, why doesn’t America have a sales tax refund system in place? Europe has it. Singapore has it — hello, GST?
Just wondering. That’s all.