Georgia sales tax on manufacturer rebates

Georgia sales tax on manufacturer rebates

Coupons: Merchant and Manufacturers

Sales price reductions arising from the use of coupons or coupon codes are treated in the same way that discounts are. We normally refer to these as “store” or “manufacturer’s” coupons. Store coupons are price reductions offered directly by the retailer and are not reimbursed by the manufacturer or distributor. These reductions in the selling price also reduce the amount subject to sales tax.
Because discounts are generally offered directly by the retailer and reduce the amount of the sales price and the cash received by the retailer, the sales tax applies to the price after the discount is applied. For example, your normal selling price is $30 but you are offering a 5 percent discount for first time customers. The tax base is $28.50. The same holds true if you are offering a dollar discount rather than a percentage discount. The normal price is $30.00 but you are offering a $5.00 discount for returning customers. Your tax base (prior to any taxable shipping) is $25.00.
If, however, the discount is sponsored by the manufacturer or the distributorand you will be reimbursed by either of these parties for offering the discount, the sales tax base is the full sales price and not the reduced sales price. As noted below with manufacturer’s coupons, because the tax base is the amount of receipts you receive for selling the product, the states generally don’t distinguish whether the payment comes from the customer or by some third party.   As noted above in the Georgia definition, coupons that are reimbursed by a third-party are NOT treated as a sales price adjustment. This rule is pretty uniform across the country.

Georgia sales tax on manufacturer rebates

Ansari Law Firm

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