Tax Rules: Final: 5703-9
5703-9-15 Sales and use tax; coupons, coupon books,
and gift certificates
(A) For the purposes of this rule:
(1) "Coupon" means a certificate, ticket, card or other
document which entitles the bearer thereof to a specified
discount on the purchase of tangible personal property or
services. Discounts may include either fixed amount or
percentage reductions from the cost of merchandise or free
merchandise with the purchase of other items.
(2) "Coupon book" means a bound collection of coupons that
are redeemable by a merchant or several designated merchants
and includes, such things as dining or entertainment discount
clubs.
(3) "Gift certificate" means a document which has a face
value toward the purchase of tangible personal property or
services.
(B) Coupons published by a vendor or on behalf of a vendor in
a newspaper, handbill, magazine, or by any method and
distributed to the public without charge, other than the cost
of the newspaper or magazine, and for which the redeeming
vendor receives no reimbursement, are considered to be
discounts allowed prior to the consummation of the sale and
are not part of the taxable price.
(C) When coupons that are published by a manufacturer,
distributor, wholesaler, or any other person, and for which
the vendor is reimbursed by the manufacturer, distributor, or
wholesaler upon surrender of the coupons, are redeemed by a
consumer, the price for tax purposes is the selling price of
such property or services before application of the coupon
amount. If the vendor enhances the value of a coupon, the
amount of the unreimbursed enhancement will be treated in the
manner described in paragraph (B) of this rule.
(D)(1) Coupons, coupon books, and gift certificates which are
sold, either by the vendor which anticipates redeeming them
or by any corporation, association, or other person for use
among a variety of vendors, are not to be treated as the sale
of tangible personal property and no tax should be collected
on such sales.
(2) When a purchased coupon, coupon book, or gift certificate
is used to purchase taxable tangible personal property or
services, the price for tax purposes is the selling price of
such property or services before application of the discount
or gift certificate amount.
Effective: 11-4-91
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5739.01
Prior effective dates: 7-11-39, 1-1-62, 6-12-82 as 5703-9-16
and 5703-9