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#1
Old 02-28-2017, 08:37 PM
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Domino's delivery charge not taxed?

Domino's places the following note on the bottom of my online receipt: "Any delivery charge is not a tip to your driver." Where I live in NJ, the delivery charge is $2.50. The thing is, there is no sales tax applied to the delivery charge, only on the food. That tells me that the driver gets the charge. Is that right? So isn't that basically a tip? Maybe it's shared amongst all of the workers. But I still think it's a bit disingenuous.
#2
Old 02-28-2017, 08:41 PM
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As in most states, very few services are subject to sales tax in New Jersey.
#3
Old 02-28-2017, 08:43 PM
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Why do you think the driver gets the $2.50? Domino's charges you $2.50 for delivery, gives the driver whatever for mileage (or whatever the arrangement is) and keeps the rest.

Don't know anything about NJ, but in Missouri, delivery and other service charges are not subject to sales tax. That doesn't automatically mean they go to the individual performing the service.
#4
Old 02-28-2017, 08:46 PM
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Yeah, I don't get it either. What does whether you're paying tax or not have to do with who gets the money?
#5
Old 02-28-2017, 08:52 PM
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Originally Posted by TimeWinder View Post
Yeah, I don't get it either. What does whether you're paying tax or not have to do with who gets the money?
I assumed that any sale would generate a sales tax. Apparently a bad assumption on my part.
#6
Old 03-01-2017, 10:20 AM
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Originally Posted by Jackknifed Juggernaut View Post
I assumed that any sale would generate a sales tax. Apparently a bad assumption on my part.
Yeah. The assumption that "services" and "goods" are all the same in tax code.

Actually, it's a safer assumption that in matters of tax code, there is no safe assumption. It doesn't have to match your experience anywhere else. It doesn't have to make sense. It just has to be tax code.
#7
Old 03-01-2017, 01:31 PM
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Quote:
Originally Posted by Jackknifed Juggernaut View Post
I assumed that any sale would generate a sales tax. Apparently a bad assumption on my part.
Most states separate out goods and services, and the tax rates depending on what those goods and services are vary. For example, some states have different sales tax rates based on whether the food is prepared or whether it is an ingredient ("grocery tax.") Many states, like yours, don't charge sales tax on services, or they restrict what services are taxed. If you go to an auto mechanic, you may notice that parts and labor are tallied up separately and taxed or not taxed accordingly. Or if you use an attorney, you may note no sales tax is added to their rate. It depends on the sales tax laws in your jurisdiction, but, generally, most states do make some sort of distinction between goods and services for the purposes of sales tax, often exempting the latter. (And even with "goods," there can be qualifiers like "tangible goods," so some digital products, for example, here in Illinois are not subject to sales tax.)

Last edited by pulykamell; 03-01-2017 at 01:34 PM.
#8
Old 03-01-2017, 01:43 PM
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Quote:
Originally Posted by Jackknifed Juggernaut View Post
I assumed that any sale would generate a sales tax. Apparently a bad assumption on my part.
it depends on the state and location, but in many (most?) like Michigan, sales tax is only applied to the sale of "goods." MI exempts things like services fees and groceries. Prepared food is subject to sales tax.
#9
Old 03-01-2017, 04:05 PM
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Ditto mail order goods (in most places if not all). The shipping fee is not taxable.

Hence on eBay and such people selling small items for a penny with a hefty shipping and handling charge. (Though they are also bypassing seller fees based on sales price.)
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