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Last Updated: 6/1/2017

Discounts and Coupons

Discounts and coupons allow customers to buy lodging at a reduced price. The taxable price depends on if you are reimbursed for the discount or coupon being redeemed.

Are you reimbursed by a third party?

Charge sales tax on:

Yes

Total sales price before your subtract the discount amount

No

Sales price after you subtract the discount amount

Daily deal website vouchers and coupons

Generally, customers buy discount vouchers and group coupons online and then bring them to the retailer for the discount. The purchase of a discount voucher is not taxable. If the item (or service) is taxable, charge sales tax when the voucher or coupon is redeemed. See the table below for details.

Do you know how much the customer paid for the voucher?

Charge sales tax on:

Yes

Amount paid for the discount voucher

No

Face value of the discount voucher

Note: You must keep records showing how you calculated the tax.

For more information, see Fact Sheet 167, Coupons, Discounts, and Other Forms of Payment.

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