Some States Like Nebraska: Sensible Sales Tax Treatment Of “Deal Of The Day” Vouchers Approved Over Four States’ Objections

sales taxWhile day deal vouchers from companies like Groupon can get you into a pricey art exhibit or make it simple for you to eat at your favorite steak house for half the cost, they’ve caused some headaches in the tax world.

Groupon offers the customer the chance to purchase a good or service for a significant discount with the retailer sharing in the revenues. Nevertheless, there arethere’re currently questions about how to apply states’ sales tax laws to these vouchers. Now let me tell you something. Most states agree that the customer should’ve been taxed at the price they pay for the voucher, not the face value from the retailer. Some states, like Nebraska, want the option to tax customers at the face value. For more detail on Nebraska’s proposed solution, see Joseph Henchman’s previous post on the subject.

The Streamlined Sales Tax Project Governing Board recently gave initial approval to a proposal that would require states to tax at the price paid unless the discounted price wasn’t clearly stated on the voucher.

sales taxIn another step in the right direction, SSTP didn’t even consider a proposal that would give the states the option to tax the vouchers at their face value. Not surprisingly, state tax officials fromNebraska opposed this vote, together with Georgia, Kansas, and New Jersey. SSTP’s move to an unified rule on taxing the price paid for vouchers is good policy. People should pay sales tax on the basis of what they are spending, not depending on an arbitrary value. Paying a tax on the face value from the retailer would be like buying a 25 but then paying taxes on the phrasemainverbmainverb25.

Additionally, simplifying the tax to always apply to the price paid would lower class risk action law suits against the state for over collecting taxes. These lawsuits are costly and often outweigh the additional benefits tax revenue. The rule makes it obvious to both customers and retailers what amount taxes could be collected at purchase time and severely reduces the risk of error. There arethere’re still barriers in place before it can take effect, while this all sounds like good news for the customers. Needless to say, an additional affirmative vote is required and SSTP is establishing a work group to spend more time on the issue and examine other models for day deals. Nonetheless, we won’t judge this too early but it’d be problematic to develop a few different tax rules specific to each day deal model.

Today is August 25, the National 100th birthday Park Service.

The Service manages 59 national parks and 354 other sites, areas, and monuments. Whenever, The NPS spends about mainverbmainverb 1812 War pushed aside American militia at Bladensburg. Washington, and set fire to government buildings including the.

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