What is the name of your state (only U.S. law)? CA
When a merchant calculates sales tax when there is an in-store or "instant" rebate, is the customer required to pay sales tax on the full retail price of the item (e.g. $200 phone with $100 in-store rebate; CA sales tax on $100 paid or the full $200 value)? Does this operate any differently than something advertised as a discount, which I would imagine functions more like a gift?
I suspect the difference will be taxable if the retailer is compensated in any way by a third party for offering the rebate and if it is a rebate, I would presume either the manufacturer or the distributor is reimbursing the retailer for the difference to be able to offer the product at a reduced price. Now, on the other hand, if the retailer offers the product at a reduced price and receives no monetary compensation of any kind from a third party, I would suspect this amount would not be included in gross receipts and thus would not be taxable.
When a merchant calculates sales tax when there is an in-store or "instant" rebate, is the customer required to pay sales tax on the full retail price of the item (e.g. $200 phone with $100 in-store rebate; CA sales tax on $100 paid or the full $200 value)? Does this operate any differently than something advertised as a discount, which I would imagine functions more like a gift?
I suspect the difference will be taxable if the retailer is compensated in any way by a third party for offering the rebate and if it is a rebate, I would presume either the manufacturer or the distributor is reimbursing the retailer for the difference to be able to offer the product at a reduced price. Now, on the other hand, if the retailer offers the product at a reduced price and receives no monetary compensation of any kind from a third party, I would suspect this amount would not be included in gross receipts and thus would not be taxable.
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