3% SXM Tax - Legit or was I taken?

[Karysa]

On the 23rd of March my daughter purchased $30.00 worth of nail polish at DEL Sol on Front Street. Since she needed a loan I handed her the $30.00 and she turned to me and said I need 90 more cents. I said no you don't there is no sales tax in St. Maarten. The cashier told me that yes there is a 3 percent SXM tax. When I questioned this she assured me that it had been in place for the last 2-3 months. I told her that we had made other purchases on the island over the last several days and this was the first time that we were charged tax at any store. She stated that the other stores are including this tax in the price of the purchase but they are not doing so and instead are charging this 3% tax at the time of purchase. Of course I asked about this at other stores and they stated that there was no such tax hidden or any tax otherwise. Oh and by the way the tax receipt clearly reads SXM tax on it. Anyone else experience something like this or have any knowledge that there is indeed a sales tax on at least the Dutch side of the island that is being kept hush-hush from the tourists?

[crewsweeper]

This is not a sales tax. It's a "turnover tax" and you should not have been charged for it.

 

http://www.sxm-info.com/info.html#customs

[Karysa]

This is not a sales tax. It's a "turnover tax" and you should not have been charged for it.

 

http://www.sxm-info.com/info.html#customs

 

Very interesting indeed. Thanks for the information. So now comes the question, is the island truly duty free or are the majority of the stores just incorporating this 3% tax into the price? When I asked at one of the electronic stores they were quite upset that Del Sol charged this tax and denied that they hid this tax in their price and told me that this would give St. Maarten a bad name since it is known as the "100% duty free island". The TOT looks like it has been in place for many years and yet the salesperson told me that the sales tax that we were charged was only in place for the last 2-3 months. Something is just not adding up to me.

[The Big Booper]

Very interesting indeed. Thanks for the information. So now comes the question, is the island truly duty free or are the majority of the stores just incorporating this 3% tax into the price? When I asked at one of the electronic stores they were quite upset that Del Sol charged this tax and denied that they hid this tax in their price and told me that this would give St. Maarten a bad name since it is known as the "100% duty free island". The TOT looks like it has been in place for many years and yet the salesperson told me that the sales tax that we were charged was only in place for the last 2-3 months. Something is just not adding up to me.

 

Where is Gary? He spends 4-5 weeks a year on the island. Or Ken?

 

On all our trips we have never paid any tax at all and have bought a few things from Del Sol (not recently, though).

[kal]

The whole issue on add-ons to a bill has always been an issue. All government imposed taxes (TOT, turnover Tax, SC or equivalent) are considered an overhead item for the merchant and must be included in the price.

 

For restaurants, it becomes a much bigger issue with "service" charges. It's further complicated because the French side is different from the Dutch side. On the French side the service fee (15 to 19%) must be included (hidden) in the stated price unless it is specifically stated on the menu that it isn't included. On both sides of the island restaurants pay a wage and benefits so it's not as if the wait staff are living on tips. Typically the French will give a tip of maybe a couple of dollars IF the service is extraordinarily good.

 

Restaurant owners will say the 15% service charge is NOT a tip as that money goes to staff (including owners) for benefits. There are owners that keep 5% to 10% of the service charge to make up for forgetfulness, breakage, and theft. Unfortunately Americans often leave a 15% tip when 15% is already included. Thus the extra payment is 30%. That's why French wait staff really like American customers.

 

Taken together read carefully, and ask questions before making a transaction. You can always check out another place to compare total costs before making a decision.

 

I had a meal at the Pasanggrahan where the bill added on 15% service. Unfortunately the service was less than abominal (spelled horrible) so I crossed out the 15% and paid with a credit card. The nasty waiter questioned why and I told her exactly how I felt about the service. I asked to speak with the Manager, but of course the Manager was "gone". She gave me a receipt for the credit card transaction without the 15% charge. Subsequently, when I got home, the credit card monthly statement showed the charge to be 15% higher. Needless to say, I will never return to the Pasanggrahan.

[Karysa]

The whole issue on add-ons to a bill has always been an issue. All government imposed taxes (TOT, turnover Tax, SC or equivalent) are considered an overhead item for the merchant and must be included in the price.

 

For restaurants, it becomes a much bigger issue with "service" charges. It's further complicated because the French side is different from the Dutch side. On the French side the service fee (15 to 19%) must be included (hidden) in the stated price unless it is specifically stated on the menu that it isn't included. On both sides of the island restaurants pay a wage and benefits so it's not as if the wait staff are living on tips. Typically the French will give a tip of maybe a couple of dollars IF the service is extraordinarily good.

 

Restaurant owners will say the 15% service charge is NOT a tip as that money goes to staff (including owners) for benefits. There are owners that keep 5% to 10% of the service charge to make up for forgetfulness, breakage, and theft. Unfortunately Americans often leave a 15% tip when 15% is already included. Thus the extra payment is 30%. That's why French wait staff really like American customers.

 

Taken together read carefully, and ask questions before making a transaction. You can always check out another place to compare total costs before making a decision.

 

I had a meal at the Pasanggrahan where the bill added on 15% service. Unfortunately the service was less than abominal (spelled horrible) so I crossed out the 15% and paid with a credit card. The nasty waiter questioned why and I told her exactly how I felt about the service. I asked to speak with the Manager, but of course the Manager was "gone". She gave me a receipt for the credit card transaction without the 15% charge. Subsequently, when I got home, the credit card monthly statement showed the charge to be 15% higher. Needless to say, I will never return to the Pasanggrahan.

 

So Kal, what do you think the salesperson meant when she told me that it was a new tax only in the last 2-3 months? It was a Wednesday afternoon and 3 large ships were in port do you think that it is something that they charge everyday or maybe only sometimes?;) By the information that Crewsweeper provided it appears that the TOT has been around for more than 5 years. When I read it, it appeared like a quite threatening letter addressed to the merchants. Let me assure you the ones that I approached after my incident in Del Sol were very quick to tell me that there is NO TAX in St. Maarten and no one whatsoever made any mention of a TOT of 3% that may have helped to explain the 3% tax that we were just charged.

 

We were always told that the service in the restaurants on the island was slow because the staff were on island time, now we know the real reason.:rolleyes: We always find better service at the restaurants where one of the owners is up front and visible.

[kal]

There always have been a number of government charges on business owners, but those "taxes" are nothing like a vat or sales tax like we see elsewhere. They are all buried into the overhead cost just like business taxes in the US. I am not aware of any new government charges, but will as some of my friends who own businesses on the island. I leave in 3 weeks and return early in May so please remind me.

 

I don't know how Del Sol runs their shop, but it would appear to be unique. Lots of odd things happen on the island so anything is possible. As an example, the owner of the Sunset Beach Bar didn't pay the government so eventually they grabbed the assets and he left the island. The same thing happened to another prominent bar/restaurant owner a year ago.

[Karysa]

Thanks Kal, it was just something we never ran into before and for only one store of the many that we made small purchases in to have it really caught my attention.

[gtaylor]

Where is Gary? He spends 4-5 weeks a year on the island. Or Ken?

 

<snip>

 

Never hit 5 weeks (yet), but have enjoyed several 4 week visits.

 

I've been off for a couple days because I lost two important channels on cable tv, cable co. came and decided they had to re-pull the feed from the pole through conduit to upgrade wire, conduit also contained phone cable, pull 'burned' phone cable (also DSL), had to pull new phone cable, that pull damaged terminal connection to phone company block, and on and on.

 

Back up this afternoon.

 

gary

[gtaylor]

The Turn-Over-Tax (TOT) has been there for as long as I can remember.

 

My understanding, as stated above, is that it is to be absorbed by the business, and certainly not to be passed on to the customer.

 

I don't think that I have ever been presented with a bill that explicitly included a stated Government Tax while shopping on the Dutch side.

 

The link to Eric's website lays it out pretty clearly.

 

The concerns that my friend kal posts about restaurants are also certainly a another consideration, but different.

 

We've crossed out a 'service charge' or such when we've known (or suspected) that it was already supposed to be included in the bill.

 

All that said, I have greater concerns.

 

The island is "soon" to obtain something like Country Status. Their budget is woefully inadequate and the Kingdom has directed that they do something to bring their fiscal state into order.

 

The early solutions presented have been a proposed increase in the Turnover Tax (TOT) that we're discussing here, the excise tax on Gasoline, and implementing a tax on Alcohol and Tobacco sales on the Dutch side.

 

That they are even considering doing so indicates an economic distrust of the current environment. And perhaps to the claim of a 'Duty Free' island?

 

gary

 

kal, you had never disclosed the circumstances of your Passanggrahan exisode. So sorry.

[The Big Booper]

 

..>>SNIP<<.... As an example, the owner of the Sunset Beach Bar didn't pay the government so eventually they grabbed the assets and he left the island. The same thing happened to another prominent bar/restaurant owner a year ago.

 

Thanks for the further explanation of the SBB episode.

 

So the government imposes these tax(es) on the businesses which incorporate them into their pricing. And aren't allowed to separate them out when putting up a menu or price list.

 

Sounds like here in the States where most of the retail price of gasoline is comprised of taxes imposed by the Feds, States, Counties, Sales Taxes, etc. The average person is not aware of this. I remember back in the 60's when I started driving and gas cost 30-32 cents a gallon. The pumps used to have a multi section sign showing gas price, other taxes, sales tax and total price per gallon. If they had this now the people would be totally pi--ed off. With good reason.

[broberts]

. . .

I had a meal at the Pasanggrahan where the bill added on 15% service. Unfortunately the service was less than abominal (spelled horrible) so I crossed out the 15% and paid with a credit card. The nasty waiter questioned why and I told her exactly how I felt about the service. I asked to speak with the Manager, but of course the Manager was "gone". She gave me a receipt for the credit card transaction without the 15% charge. Subsequently, when I got home, the credit card monthly statement showed the charge to be 15% higher. Needless to say, I will never return to the Pasanggrahan.

 

I hope you disputed the charge with your cc company.

[Karysa]

The Turn-Over-Tax (TOT) has been there for as long as I can remember.

 

My understanding, as stated above, is that it is to be absorbed by the business, and certainly not to be passed on to the customer.

 

I don't think that I have ever been presented with a bill that explicitly included a stated Government Tax while shopping on the Dutch side.

 

The link to Eric's website lays it out pretty clearly.

 

The concerns that my friend kal posts about restaurants are also certainly a another consideration, but different.

 

We've crossed out a 'service charge' or such when we've known (or suspected) that it was already supposed to be included in the bill.

 

All that said, I have greater concerns.

 

The island is "soon" to obtain something like Country Status. Their budget is woefully inadequate and the Kingdom has directed that they do something to bring their fiscal state into order.

 

The early solutions presented have been a proposed increase in the Turnover Tax (TOT) that we're discussing here, the excise tax on Gasoline, and implementing a tax on Alcohol and Tobacco sales on the Dutch side.

 

That they are even considering doing so indicates an economic distrust of the current environment. And perhaps to the claim of a 'Duty Free' island?

 

gary

 

We have heard that 2010 may actually be the year that it happens and we are wondering if this is going to be a positive or negative for the island and it's visitors.

[Karysa]

Thanks for the further explanation of the SBB episode.

 

So the government imposes these tax(es) on the businesses which incorporate them into their pricing. And aren't allowed to separate them out when putting up a menu or price list.

 

Sounds like here in the States where most of the retail price of gasoline is comprised of taxes imposed by the Feds, States, Counties, Sales Taxes, etc. The average person is not aware of this. I remember back in the 60's when I started driving and gas cost 30-32 cents a gallon. The pumps used to have a multi section sign showing gas price, other taxes, sales tax and total price per gallon. If they had this now the people would be totally pi--ed off. With good reason.

 

I wonder if Del Sol is rebelling because the salesperson told me that this is a new tax in place and clearly no other store was even mentioning it let alone charging for it. That letter that has been referenced that was addressed to the store owners was pretty clear and in my opinion on the threatening side so it makes me wonder what is rally going on.

[kal]

...kal, you had never disclosed the circumstances of your Passanggrahan exisode. So sorry.

 

We had happy hour cocktails at the Greenhouse then walked over to the Passanggrahan for dinner. There were only people at two other tables and we had a group of eight. It took 30 minutes before the waitress even brought us a dinner menu. Meantime about 4-5 other tables were filled. We quickly ordered, then had to wait forever to be served. Before we received our food, all the other tables had been served, and except for 2, had left the establishment. The quality of some dishes was very poor and the waitress really had an attitude.

 

I did dispute the charge on the credit card but don't recall the outcome. I have not previously made mention of the issue because others seem to favor the place. Maybe the waitress had a bad burito and obviously suffered from intestinal blockage.

[scoshe]

We were in port on the same day, March 23rd, and rented a jeep. We had a great time, and would definitely do it again. After reading this thread, it makes me wonder if we wer taken a little bit. On top of the price of the rental, we were charged a $20 port charge, and 12% gov tax. Is the customary on all rentals, or did they just happen to add this in. I was told about these charges before I signed, so I just assumed that these charges were customary.

[gtaylor]

I don't know about an additional 'Port Charge', but I'm pretty sure that we pay an 8% Government tax on car rentals while on the island.

 

gary