Am i supposed to be charged sales tax on a gift card purchase?
bennyboytx asked:
Just went to radioshack and bought a PlayStation Network (gift)Card for $20. I was charged 21.50. Just wondering if that is right since I’m going to be charged tax again on the items i purchase on the PlayStation network. I’m from Illinois.
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Yes, you were properly charged sales tax. Had you purchased a service rather than goods then you would not have been charged tax. marshfield_meme
im not positive, but you might have got ripped off. im from Connecticut, and after my recent holiday shopping, i know for a fact that gift cards here are not taxed. reason being, that the person who spends the gift cards are still being charged the sales tax on whatever he or she buys with it.
im not familiar with Illinois state laws, but i did find this article which leads me to believe you should not have gotten charged it. granted it is from 2004 so things could have changed since then. the link to the entire article is in the source, but here are a few lines…
In Illinois, the legislature has passed and the governor has just signed a law to protect consumers from these charges.
“Gift cards have a cash equivalent, but when stores start charging unnecessary or hidden fees, it’s as if gift cards are the gift that keeps on taking,” said Illinois Attorney General Lisa Madigan, who helped draft and secure passage of the legislation.
“This legislation is critical when it comes to protecting consumers and ensuring they have the information they need to make decisions that won’t cost them later.”
The new Illinois law offers an incentive to retailers who remove all fees and charges from gift cards, exempting them for the Uniform Disposition of the Unclaimed Property Act. It also requires clear disclosure of all fees, charges and expiration dates to the purchaser or user of the gift cards. Tim
Normally you don’t pay sales tax on the purchase of a gift card. The sales tax is charged when you use the gift card if you buy something taxable. Are you sure the $1.50 was sales tax, and not a fee of some kind? It’s possible that IL has special rules not common in other states. Judy
Chances are good that you were improperly charged if the additional charge was sales tax. You can squawk to Radio Shack or next time go somewhere else that knows not to charge sales tax. Check it out most places will not charge you sales tax for the purchase of a gift card.
Illinois has no sales tax on gift cards. ninasgramma