Tax and gift card

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Level 1

4 points

Tax and gift card

Why is it that my gift card is being added after they have taxed me? Example: I want to purchase an iPad which am getting at a 309 rate (original 329) and I have a $25 gift card which would bring the total down to 284 which after my NYC sale tax 25.21 (8.875%) would have the total at 309.21. But instead they tax me at a rate of 309 which makes 8.875% go to $27.42 which then brings my total to 336.42 only to than take of the $25 from the 336.42 instead off of the 309!!! When I called CS they stayed that’s what there policy is!! I know it’s like 2 bucks but saving is saving and that’s not fare and shouldn’t do that!!

Posted on Nov 28, 2018 9:04 AM

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Answer 1

Nov 28, 2018 9:44 AM in response to kamarla

Tax is applied to the actual sticker sales price before any promotional discounts, gift discounts, etc are applied. I think just about every State’s sales tax law are written that way. So Apple is not ripping you off - they’re just obeying the tax laws.

Since a gift card merely represents cash in your hand, the tax is based on the price at point of sale, which would be your $309 sales price. Note that whomever bought the gift card did not pay tax on purchasing that card. They merely exchanged $25 for a piece of plastic redeemable for $25.

trivia - the IRS even considers gift cards from your employer as taxable supplemental income.

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Answer 2

ShagCA

Level 5

6,365 points

Nov 28, 2018 9:18 AM in response to kamarla

That math is correct. Gift card is like cash. The taxable total remains the same regardless of how you pay. If you pay them with $300 gift card or cash, your taxable amount does not become $9. Using your math, the device becomes tax free if you pay the whole amount with gift card or cash.

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Tax and gift card

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