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will i be charged sales tax on $140 or $40? in other words, do i have to pay sales tax on the hundred dollars that was discounted? i think it was a retailer's coupon. i am in the state of colorado if that helps.

thank you for your help.

2007-06-18 05:59:44 · 5 answers · asked by Tara F 1 in Business & Finance Taxes United States

5 answers

Was this a "manufacturer's coupon" or a "store coupon"?

If the coupon was from the manufacturer, then the store is receiving $40 from you and $100 from the manufacturer. You pay sales tax on the entire amount of $140 since the store is receiving $140 in sales.

If the coupon was from the store, then the store is not receiving $100 from anyone, and the sale is for $40. You should only be charged sales tax on $40.

However, some coupons that look like store coupons are in fact manufacturer's coupons (some CVS pharmacy coupons come to mind). You pay tax on the full price on these. There sometimes is fine print on these coupons saying "customer pays tax on pre-coupon price" or something similar.

2007-06-18 07:34:11 · answer #1 · answered by ninasgramma 7 · 0 0

the answer is it doesn't matter. tax is applied to both the sale amount and the discount in most states and most stores. it ultimately is up to the discretion of the retialer as to how it is applied but common practice is that the $140 is taxed, for example 10%, totaling $154, and then the 100 coupon is applied and also taxed, subtracting $110 from the total so you would end up paying $44 which is equal to just adding tax onto the $40. that is the way it has worked at every retailer i have worked in at least. as i said some stores, probably small mom and pops places, might just add tax to the $140 and take a straight 100 off the $154.

2007-06-18 06:25:35 · answer #2 · answered by Brandon 3 · 0 1

You'd pay sales tax on the total cost of the item, $140.

2007-06-18 06:24:19 · answer #3 · answered by Judy 7 · 0 0

Yes, the store owes tax for the sales amount, so tax is calculated first, then the coupon is applied.

2007-06-18 06:04:19 · answer #4 · answered by Anonymous · 0 0

A trip to Cuba and the Caribbean. I'll have to pay for a LOT of other things though:)

2016-05-18 21:37:28 · answer #5 · answered by aracelis 3 · 0 0

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