Is This Legal Or Not Sam's Club Sales Tax

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  #16  
Old 02-14-2015, 09:00 AM
RVRoadie RVRoadie is offline
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Coupons and rebates are a form of payment that the merchant will be collecting from the manufacturer on your behalf, not a reduction in the sales price. Therefore, taxes are due on the full sale price. It is no different than using a gift card to make a purchase. You pay taxes on the total purchase price, regardless of how you paid for the purchase.
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Old 02-14-2015, 09:36 AM
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I just looked up at Fl sales tax site and they must tax on original price prior to rebate or coupon being applied.
  #18  
Old 02-14-2015, 11:36 AM
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Quote:
Originally Posted by SouthOfTheBorder View Post
Perhaps the "Instant Savings" for TT is really a "couponless" coupon, in which Sam's will get reimbursed by TT for the amount of the instant savings. This results in a taxable transaction amount equal to the original price.

Don

PS I am not a tax expert
It seems to me that if that were the case, then TT should pay the additional sales tax.
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  #19  
Old 02-14-2015, 11:39 AM
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Quote:
Originally Posted by blueash View Post
You received an Instant Savings Cost. This is like a rebate not a discount. Think of it as you bought the product at regular cost and receive a form to fill in and mail to the company to get fifteen dollars back. Instead Sams gave you the 15 back right away. Of course you had to pay tax on the amount of your pre-rebate purchase. What exactly, if you still have it, does your receipt say?

Here is the operative language from Sam's Club website

" Instant Savings items are subject to availability and dates. Select Instant Savings are available online. For Click 'n' Pull purchases, Instant Savings can be redeemed at point of sale at the club with the primary membership card. State and local laws may require sales tax to be charged on the pre-discounted price of an item with an Instant Savings offer"

The mechanism here is that Sams is receiving not just the 55 dollars you paid, as they are submitting the 15 rebate for you to the Turbo tax company which remits the 15 to Sams. Thus the sale is really the 55 Sams got from you and the 15 from T Tax, or the full listed price of 70 dollars. So Sam's needs to collect sales tax on the 70 it gets.

If however, there was no rebate coming from T.Tax and Sams was only getting the 55 from you, then the tax would be on 55 dollars. If you ever use a manufacturer's coupon (not a store coupon) the tax should be on the pre-coupon rate.
That makes perfect sense. But I wonder if you are responsible for reporting that $15 rebate as personal income?
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  #20  
Old 02-14-2015, 02:34 PM
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Old 02-14-2015, 03:19 PM
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You learn something new everyday!

I learn a great deal from this forum and from others far better informed than I am.

I can't help being amused by the fact that after the problem is solved that someone, usually from another state, will come on and offer a very long and interesting dialogue on the issue that has been solved.

Only in The Villages.
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  #22  
Old 02-14-2015, 05:43 PM
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Quote:
Originally Posted by nyclicker View Post
Some states require tax be paid on the original price of the item, not the instant rebate price. Costco does the same thing as Sam's.
He iS correct. And the less people shopping at Sams Club the better.

Thank you.
  #23  
Old 02-14-2015, 09:27 PM
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Good information. I plan to ask Sams corporate about it Monday and have already submitted it to Florida sales tax for their take on it.

Maybe I should have mentioned one manager did say the higher tax was not correct, but a supervisor and another manager said it was correct, so even all the folks in the store do not agree.

It's not a really big thing but it appears there should be a mentioned on the price tag in the store that tax will be applied to the original amount if that's the proper amount to tax. If this item were mixed in with a lot of other items on a receipt I doubt I would have ever spotted it but in this case it was a single item.

Will post any information I get from FL or Sams.

Thanks
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  #24  
Old 02-14-2015, 10:01 PM
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It is not an issue with original price. If I set a price of $10 and my cost was $5 and I sell at $10, the sales tax is on $10. If I choose to sell at $8, then the sales tax is on $8. If I sell at $8, and the customer gives a $2 Coupon saver and I get $6 from the Customer , I still get $8 after I send in the coupon and get rebate. It still is an $8 sale which would be taxed at that rate. Makes sense to me when you think it through.
  #25  
Old 02-15-2015, 07:00 AM
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I just read something that said if a discount is a rebate from the manufacturer then it is taxable.

??????
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  #26  
Old 02-15-2015, 07:41 AM
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Quote:
Originally Posted by TNLAKEPANDA View Post
He iS correct. And the less people shopping at Sams Club the better.

Thank you.

It does get crowded at this time of year. Have you EVER seen so many mobility scooters in one place????
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  #27  
Old 02-21-2015, 12:57 PM
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Default TAX Explanation

Look's like we'll just keep paying the most sales tax. Though it appears the tax was overcharged there is really no interest in fixing the problem. It's only when we are taxed too little that it gets much attention apparently.

Sam's corporate said it was a Sam's reduction or a dealer's discount and not a Turbo Tax reduction so according to the reply from FL the tax should have been applied to the reduced price.



Florida's Reply:

From: Tax Information
Date: 2/20/15 5:00 PM
Subject: Response (control #189748)

From: Florida Department of Revenue, Tallahassee

The Department of Revenue has received your inquiry asking about application of sales tax to discounted items of tangible personal property at retail.

Per Rule 12A-1.018, Florida Administrative Code, “A coupon or refund issued directly by the manufacturer is not to be construed as a reduction in selling price by the dealer”, and as such, tax would be applied to the original cost of the item.

Conversely, also per Rule 12A-1.018, Florida Administrative Code, “A dealer’s discount is a reduction in selling price if taken at the moment of sale or purchase of a product”, and in that case, the tax would be applied to the reduced price of the item.

Essentially, while the manufacturer’s discount does not reduce the price to the merchant, and threrefore does not reduce the tax on the item, a store coupon or discount directly reduces the amount of money taken in by the store for the item, and as such the tax would be based upon the reduced price.

Pertinent legal citations may be found in our Revenue Law Library at https://revenuelaw.state.fl.us/Pages/Home.aspx.
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Last edited by KeepingItReal; 02-21-2015 at 08:58 PM.
  #28  
Old 02-21-2015, 08:57 PM
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Tax response from Fl below......
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