Missouri Code of State Regulations Chapter 103 clearly spells out in the section 12 CSR 10-103.555 that sales tax is calculated after coupons.
From page 13
"When the seller accepts third party coupons, only the price paid by the purchaser is included in the gross receipts subject to tax."
The document also includes examples.
From pages 13 and 14.
"A grocery store accepts manufacturer’s coupons from its customers on purchases of various goods. The store sells aluminum foil for $1.50. The customer presents to the store a $.50 manufacturer’s coupon and pays the remaining balance of $1.00. The store submits the $.50 coupon to the manufacturer for payment of the $.50. The gross receipts from the sale of the aluminum foil are $1.00 and total taxable sales are $1.00. Tax should be charged on $1.00."
If you contact a retailer charging sales tax before coupons, I hope this information will help.
If any reader has a legal background and can help with the phrasing of the legalese, it would be greatly appreciated. You can contact me by email if you need to be totally anonymous.
Posts
Awesome! Thanks Jeri!
ReplyDeleteYou're welcome, Kelly!
ReplyDeleteMy husband is an attorney. I might be able to convince him to look at/ give his opinion. But we live in Illinois, so doesn't affect us much
ReplyDeleteI know Schnucks does it wrong, at least with catalina coupons. Has anyone contacted their corporate office and asked about it? Have they given a response? I am curious what they would say in defense when it seems so clear what the law is.
ReplyDeleteJeri: I am a lawyer (NOT licensed in MO, so can't comment on MO law) but as I read the statute and the examples they are pretty clear and you've nailed it. Sales tax is only calculated after all coupon discounts are taken.
ReplyDeleteThe statute reads:
"(C) When the seller accepts third party
coupons, only the price paid by the purchaser
is included in the gross receipts subject to
tax."
"(D) The value of a store coupon issued and
redeemed by a seller is not subject to tax.
Store coupons are not included in gross
receipts."
These two examples were also kind of useful:
"(B) On Tuesdays, the same grocery store in
Example (A) doubles all manufacturers’
coupons. The store then receives $.50 from
the customer and $.50 from the manufacturer.
Gross receipts are $.50, and total taxable
sales are $.50. Tax should be charged on
$.50."
PRETTY CLEAR - tax is only on the amount AFTER coupon deductions are taken.
"(C) An appliance manufacturer offers a
$100 cash rebate on an $800 refrigerator.
Tax is due on $700, if the rebate is received
by the customer at the time of purchase. If the
customer must request the rebate from the
manufacturer at a later date, tax is due on
$800 because that is the sale price paid at the
time of purchase."
THIS EXAMPLE makes me think of the RR or rebates at Wags - those are usable on future purchases so they don't affect the current transaction. (In the future purchase, of course, the sales tax is reduced b/c the RR is used as a "coupon".)
Thanks so much for posting this!!
Debra
I was at a Hallmark store using the $10 printable and $5 magazine coupons (two people, two transactions) and we were charged tax on the amount before the coupon. :(
ReplyDeleteGloria, I contacted Hallmark corporate over the $10 coupons and they responded and said it's up to each store so we needed to talk to each store. PITA!!
ReplyDeleteHas anyone reported a business for not changing or doing this wrong? Just not sure who we should report this to or what they would do.
I also got charged full tax at the Hallmark store in Crestwood on a $6.99 item using a $5 coupon ($2.65 total after coupon) :(
ReplyDeleteThe response I got from the Attorney General office refered me to the Dept of Revenue. DOR sent me the regulation Jeri posted above but hasnt yet responded to my question about how to file complaints.
Hi All
ReplyDeleteThanks Debra!
Julie - I reported a company once. I remember it wasn't easy to get to a person who would listen to me. And, all the notes I kept are on that computer I killed when I dumped my cup of coffee on it. I must have done this all over the phone because I can't find any old emails to the DOR.
This is from memory. I ended up talking to someone in the local office of the Dept. of Revenue. I think they were in charge of sales tax complience.
They said I needed to contact the retailer first, which already had. The only reason I pursued it was the retailer wouldn't repond to me. I did talk to the DOR person a second time and they couldn't give me any further info because of confidentiality.
Several months later, I again used a coupon at that retailer they were calculating tax correctly.
I received an email response from DOR. They suggest showing a copy of the above regulation to the store that may be in violation and if they dont correct the violation, call 573-751-2836 to report it. Honestly it doesnt sound like they care much, but if anyone wants to follow up, good luck!
ReplyDeleteHi CJ - Thanks for the update. I had a terrible time when I tried to report a company before. The only person I could get to take any interest was at the local office of DOR. I think in the sales tax compliance dept.
ReplyDelete