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BTLG Table of Contents > Sales and Use Tax Annotations > G > 280.0000 Gifts, Marketing Aids, Premiums and Prizes > Annotation 280.0350

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G

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280.0000 Gifts, Marketing Aids, Premiums and Prizes— Regulation 1670

Annotation 280.0350

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280.0350 Coupons and Gift Certificates. An inquiry was received as to how sales tax applies in certain situations where coupons are tendered to a retailer at the time of purchase of tangible personal property.

If a retailer distributes coupons to the public or some segment of the public without charge, tax does not apply to the discount allowed upon redemption of the retailer's own coupon. On the other hand, where the retailer redeems coupons issued by manufacturer or by another third party, the measure of tax includes the amount collected from the customer as well as the amount collected by the retailer from the manufacturer or other third party.

Tax does not apply to the sale of gift certificates. Upon redemption of the gift certificates, the value of the certificate is includable in the measure of tax. Gift certificate transactions are not treated as discount transactions but regarded as credit memorandums. 12/19/78.