Well, I could flip the question around and ask you why I should be taxed on money I never spent, after all, that is what a sales tax is, isn't it? A fee charged by the government on the total dollar amount collected for goods and/or services provided. If, because of my coupons, I hand over $10.00 cash to your $15.00, why should i pay a tax on money that was never collected from the merchant by me?
Well,they could require the manufacturer to pay the sales tax to the store for the money the store collects from them for the coupon.
I mean, that would be rather unworkable, and I’m guessing it would change the value of coupons the manufacturer was willing to provide.
I think my distinction was that if a store and a customer decide on the price of an item, THAT is the value of the item, and is what should be taxed.
But if there is a 3rd-party payer who is helping cover the cost of the item, it makes more sense that the government would tax that true cost of the item, not just the reduced cost after the other costs are covered by the 3rd party.
If the person behind you in line gave $10 to help you pay for your purchase, you wouldn’t argue that you should pay $10 worth less of sales tax because YOU didn’t spend the money yourself; you’d expect the total sales tax to remain the same. Coupons are somewhat like that other person paying for part of your purchases, rather than the store reducing your price.
Of course, that is only sometimes true; the stores also have coupons which reduce your price. But they aren’t much different than the store issuing you loyalty dollars like Walgreens — I’m pretty sure that if you buy things using your register bucks (or whatever they are called) you still pay tax on the purchase price, even though the store actually paid for your purchase with the fake money.
I know poeple dislike taxes; I dislike high taxes, but understand that government does need to collect money for the services it provides. I think deciding to tax the PRICE of an item, rather than deducting the value of coupons, is a rational choice to make, one that will make the tax “more fair” because it will be applied more evenly across the citizens of the state.
But taxing a manufacturer’s “retail price” rather than the actual price the store sells the item for seems quite different to me. Why not simply raise the tax rate, rather than set an artificial price? (It’s like those states that collect property tax, and you know that they game the “value” of the house along with the “tax rate”, because all that matters is the total collected, not the rate, or what they say your house is worth).
I don’t live in Connecticutt, and in the end the voters of that state can decide if they like this way of being taxed or not, and can inform their representatives accordingly.