Taxing Gift Cards

[coeceo.livejournal.com]

Not specific to Davis obviously, but thought I could find some interesting opinions. I recently went to buy a gift card online, and noticed they were charging me 5% MA sales tax. That makes sense for any other purchase because the vender did have MA stores, however it seems odd to charge for a gift card right?

I'm fairly certain that everytime I've used a giftcard, I have also paid sales tax on the item purchased, so that means if you pay tax on a gift card, then pay tax again on the item you buy with that gift card, you are paying taxes twice for the same money....

Do all stores charge tax on gift cards? Does this make sense? It doesn't to me.

Comments

[svilletheatre.livejournal.com]

We don't add tax for our gift card sales; some of the things they are redeemed for are taxable (food/beverage) and some are not (tickets.) Can't speak to the nature of online sales though. I personally don't recall ever paying a tax on a gift certificate in my life!