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BTLG Table of Contents > Sales and Use Tax Annotations > G > 280.0000 Gifts, Marketing Aids, Premiums and Prizes > Annotation 280.0777

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G

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

Annotation 280.0777

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280.0777 Phone Cards. A firm proposes to seek out and find membership organizations that would promote prepaid phone cards in various ways. For example, in return for paying a certain level of dues, such as $100, the member would receive a $20 prepaid telephone card. The prepaid telephone card can be printed with the logo or special message of the sponsoring organization.

Sales of debit cards are not considered to be sales of tangible personal property within the meaning of the Sales and Use Tax Law. Instead, the debit cards are indicia of their prepaid value. Thus, the sale or use of a phone debit card as an indicia of its prepaid value is not subject to sales or use tax. Generally, the person who first sells the card as indicia of its prepaid value would be the consumer of the card, and sales or use tax would apply to the sale of the card to that person. 8/17/95.