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Sales tax on Visa gift cards??

post #1 of 14
Thread Starter 
This really pissed me off when it happened and forgot about it until I had to buy gift cards again yesterday at Target, tax free of course. I had to buy $200 worth of Visa gift cards at Walmart at the last minute for a charity fund raising event. I didn't have my tax exempt form but figured there wouldn't be tax on a gift card. Well they charge me tax and I questioned it but they insisted there was tax. So now I've paid sales tax on the $200, and then when the person goes to use them they will pay sales tax again. This can't be right, can it?
post #2 of 14
In most states the only thing taxable would be any service/convenience fee of getting the gift cards.

Of course its been awhile since i looked at tax laws for retail.
post #3 of 14
I think you were robbed. I've never paid tax on a gift card.
post #4 of 14
No tax on gift cards here in the Peoples Republic of Massachusetts. There is sales tax on phone cards though.
post #5 of 14
No sales tax on gift cards. Comapines can't even claim the monies as sales income until the cards are used.
post #6 of 14
Thread Starter 
Thanks, I knew that couldn't be correct. I'm going to get my money back and if they won't give it to me I'll dispute the charge with my credit card. It's not even my money, I was reimbursed for the purchase. It's just the principle of tax being collected twice on the same purchase.
post #7 of 14
i'd take your receipt back there and get your tax back.



that or make sure that the amount on the gift card is equal to that of the money plus the tax.
post #8 of 14
There is a fee on Visa Gifts cards here in CT it tells you right on the back they charge either $3.95 0r $4.95 its not a tax some kind of fee so a $50.00 gift card would cost you $53.95...Turn your card over to see if there is a fee posted on it.American Express Gift Cards also charge a fee.
post #9 of 14
As mentioned above, I think you got hit by a fee. A lot of store clerks mistakenly call the fee a tax.

Does the fee show up listed as tax on the receipt ?


http://www.consumerreports.org/cro/m...itfalls-ov.htm


"Bank-issued cards are different. They usually bear the logo of a major credit card and are accepted at most merchants on that credit-card network. Banks tack on a fee, typically $2 to $10, when they sell the cards and might assess other charges, described below."

Dennis
post #10 of 14
wow thats crazy taxed on a gift card
post #11 of 14
Use them when you get them too. Most start charging fees after a couple of months and can drain the card in a relatively short period of time....
post #12 of 14
Thread Starter 
Quote:
Originally Posted by BabyBunker View Post
There is a fee on Visa Gifts cards here in CT it tells you right on the back they charge either $3.95 0r $4.95 its not a tax some kind of fee so a $50.00 gift card would cost you $53.95...Turn your card over to see if there is a fee posted on it.American Express Gift Cards also charge a fee.


I was thinking that could be the case, but I'm pretty sure it came up on the receipt as tax. I'll have to ask the person who has the receipt now. I was thinking what would a stores incentive to be to sell a gift card for another store or service at face value and then have to pay the credit card company a couple percent for processing. Unless Visa gives them the cards for a discount. The cards weren't for me they were given away as a prize and I was reimbursed. It makes sense that there is some kind of fee but if they are charging it as a tax that money has to go to the state and not to Walmart.
post #13 of 14
im pretty sure theres a tax on gift cards here in MA (CVS), i got one last time and there was tax on it and there's now a expiration date on it too
post #14 of 14
Quote:
Originally Posted by BlazingRod View Post
im pretty sure theres a tax on gift cards here in MA (CVS), i got one last time and there was tax on it and there's now a expiration date on it too


Nope, no tax on gift cards. As others have said most banks charge a fee on prepaid Visa/Mastercards. There is a tax on phone cards.

As to the expiration date there's a new federal law which states any gift card issued after April 16th, 2010 and beyond must be valid for a minimum of 5 years. They can start charging you a maintenance fee after 1 year though. State laws may increase these limits even further, but those are the new Fed. minimums.
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