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  Sales tax when coupon is used

Q. If my customer uses a coupon when making a purchase; do I charge sales tax on the price before or after subtracting the coupon?


A. Sales and use taxes must be calculated on the sales price after all price reductions taken at the time of sale, including a deduction taken because a coupon is presented by the buyer. Any additional value assigned by the retailer, such as to double or triple the coupon is also excludable from the sales price. For example, if the price of the item was $5.00 and the customer presented a $.50 coupon, sales tax would apply to the net price, $4.50. If the seller doubles the coupon, deducting another $.50 from the sale, sales tax would apply to the net price, $4.00.

(Updated: 2015)

This answer is intended to provide general information concerning a frequently asked question about a current position, policy, or practice associated with the taxes administered by the Connecticut Department of Revenue Services.  It may include an informal interpretation of Connecticut tax law by the Department of Revenue Services (DRS).  However, it is not intended to serve as a legal ruling.

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