Phoenix, Arizona

I've been a Costco member for in excess of 25+ years.

Like the company, however, went to a Gilbert, AZ Costco purchased a product that had an immediate $20 coupon discount. To my surprise, Costco charges sales tax on the higher price not the actual sales price. Went directly to Sam's Club, purchase same product at the discounted price and paid sales tax on the sales price.

So, if you purcase a car or large Costco Item, beware, they will change you sales tax on the higher price, so watch out, Costco/AZ state sales tax exceeds 10%+. This is over the top! I am sure Costco will blame the State of AZ, bull ***....all they have to do is the same and all other retailers do, publish the sales price and charge sales tax on the sales price!!!!


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States decide whether you get taxed on the full amount before discounts or after. Costco just follows the state laws


This works against the consumer- Costco would be better advised to only charge customers sales tax on the amount paid, as is customary throughout the retailing world, then pay tax on a total price, before their rebate, that isn't necessarily a competitive price. They could adjust the price of the product to absorb this.

Sales taxes are already excessive and the game that this otherwise great company plays is a nuisance.

Case in point- just looked at a Nikon D3300 camera package that MSRP is $899- has discounted to $649 after a $250 "manufacturers rebate"- but then tried to charge sales tax on $899 at checkout- adding $20 to the price. Ritz camera- a reputable company- offers nearly the identical package for $667- $18 more but with an extra battery, longer extended warranty, filters and a tripod, no sales tax and free shipping.

Moral of the story: as great as Costco is, trust but verify- they often have great values, but you can't assume that includes everything they sell- sometimes actually more costly than other good retailers, especially with their little sales tax scheme.


Once again, this is not correct. States set sales tax rules and Costco and all other retailers must follow them. No scheme here.



Take a business class.

Costco directly gives you the rebate, therefore has to be paid by the actual vendor of the product later.

Because of this, it is a rebate, not a actually a coupon (legally).

People pay full tax for rebate items.

That is how it works.

You are not being ripped off, you simply don't know anything about business and legality.


If you took the time to not be an obnoxious whiner and actually asked what's going on, you'd find out what the story is with the policy. Costco doesnt charge your MORE sales tax on what you buy.

That's illegal, end of story. I ran into this, so i asked to speak with a manager about this issue. When costco has a rebate, apparently they're reimbursed by the manufacturer when youget the money off. Costco gives you the discount instead of sending away for it.

So, the government still considers that a mail in rebate, and as a result you pay income tax on the original price of the item. When that doesnt happen at another retailer it's because they're selling their merchandise at a loss, which is called a loss leader. It's a trick they use to get you into the store to spend more money. Almost all grocery stores do this.

It wasn't that hard to find this information out.

i just asked. :roll


You should have called them on it. They can't charge you sales tax on money your not spending, I would have left the item on

the counter and walked out.


Not correct, if the discount is a rebate, states charge sales tax on the full amount, not the amount you pay. It depends on the laws of the state, but the above is very typical.

OP might have not known what type of "discount" he was dealing with. Big organizations like Costco and Sams have special offices just to deal with such matters.

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