Is sales tax on gift cards normal?

[mjparker]

Just made a purchase at BlueLight.com in the form of a gift card. I was in a hurry and didn't notice that sales tax had been added to the purchase until after the order was submitted. I'm willing to eat the sales tax because I was careless, but I can't ever remember being charged sales tax on a gift card or certificate. I called BlueLight and the rep admitted that sales tax was charged, that I would be charged more sales tax when using the card at Kmart, and that the order couldn't be cancelled because the card would be sent tomorrow (on a Sunday?) and the cancellation would not be processed until Monday. The company is collecting double the sales tax on what will be a single purchase. Does this sound right to anyone? I know it will be my first and last purchase at BlueLight.com.

[LocaChica]

Sales tax shouldn't be charged on gift certificates and/or gift cards. Complain! I would definitely not shop at a place that charges tax on gcs. I purchased a few as gifts at old navy and blockbuster, neither place charged tax. Why should they? I'm exchanging my money for their card, they can then charge tax to the person who uses the card to make a purchase. sorry I'm rambling.

[kat]

I've never paid sales tax on gift certificates that I can remember. I'd call them back & ask to speak to a supervisor - let them know that you are cancelling your order & if they don't want to cancel it, then they'd better be taking the tax off because you're not about to pay that tax twice (unless there's something on their gift cards that says all taxes are prepaid - which is highly unlikely though!).

Personally, if they gave me any baloney about the order going out on a Sunday, I'd let them know that it would either need to be cancelled or else I'd be refusing the order and letting my credit card company know to refuse payment to them as well. And, then I'd put a call into my state's attorney so they could look into their tax collecting practices - you're not supposed to double tax people!

[Corganiacs]

what?!?!
When I bought the Shrek 10 Movie rental Card, they charged me tax.

But im guessing that doesnt qualify as a gift card???

[kat]

Originally posted by Corganiacs
what?!?!
When I bought the Shrek 10 Movie rental Card, they charged me tax.

But im guessing that doesnt qualify as a gift card???

I'd think in this case, you'd get charged for the sales tax up front as you wouldn't be charged again when you picked up the "free" videos (at least the Blockbuster here doesn't charge anything, even tax, when you have a prepaid rental).

On the other hand, when you pay for something at KMart, WalMart or any other store with a gift card or gift certificate, they generally do charge the tax on whatever merchandise you're buying. They treat the gc as cash - so they shouldn't charge you tax on it in the first place since it's just like putting money into a savings account at their store.

Now, if the Blockbuster tries to charge you sales tax again on the rental card, I'd bring in my original receipt & show them that you already paid it so you shouldn't have to pay it again!

[devlina2u]

NO!!! I would go back and return the gift card if I were you and had not yet usd it!! That is ridiculous!!

[fiveforall]

NO WAY!!!!!! You should not be charged tax for gift certificates!

[Robert Wiedemeyer]

You should ask who they are collecting the tax for. Then call the tax office and tell them. If they collect a tax and don't forward the funds they can get in serious trouble.

[kellylm]

I can understand the frustration this brings. I have purchased many gift cards in my time. I do not recall there ever being sales tax applied. I have had to pay some silly surcharges, which I personally find absurd. When purchasing a $25 gift card from some major names I have paid right around $3 as some surcharge or activation fee. Never have I paid tax though. I agree that there should be some follow up to this if you really want to get an answer. Maybe you can help others in the future from having to deal with this too. Unfortunate that it is too late for your benefit. Thank you for sharing so the rest of us can be aware.

[ElizabethS]

With the holidays here it is important to know the "rules and regulations" of gift cards, as well as stores that charge tax on gift cards. I do not believe this is supposed to happen, however, I also do not know that there is any way to stop stores from doing so. Gift cards are the most popular gift to give at holiday time; please share places you know charge sales tax on git cards or stores you know do not. This way we can avoid those that do and support the ones that do not. I will offer a few stores that I have purchased gift cards from that do not charge sales tax:
Banana Republic
Macy's
J.Crew
Ann Taylor
Please add to this list so we can all have a Happy Holiday and gift giving season.

[LucyBall]

Absolutely not, tax on gift cards is not typical. I would report any store that tries to charge tax on gift cards to the better business bureau. Just my opinion though.

[Landseer149]

I can remember.

[Lynn S.]

Wow, tax on gift cards, that cannot be right. If there were tax on gift cards, then you would be paying double the tax since you would be obligated to pay tax on your purchases made with said gift card too. Right?

[addisonbert]

You don't pay sales tax on gift cards. If you use them to buy something that's taxable though, you pay sales tax when you buy the taxable item.

[ashsinha]

Yes as I suppose it seems to be normal..As not much charged is charges by sales tax but yes it does affect its original cost very much..