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Discounts and Coupons

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Discounts and coupons allow customers to purchase goods and services at a reduced price.

Examples of discounts and coupons:

  • Buy one, get one free
  • Deal-of-the day
  • Manufacturer coupons or discounts
  • Membership discounts
  • Retailer coupons or discounts

The price you charge tax on 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 you subtract the discount amount
No Sales price after you subtract the discount amount

In-store discounts that are reimbursed by a third party are treated like a manufacturer’s coupon or discount even though the customer does not present a physical coupon.

Note: Sales of coupon books are not taxable.

For more information, see Coupons, Discounts, Rewards, Rebates, and Other Forms of Payment.

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