Information Release

ST 2008-01 - Sales and Use Tax: Television Converter Box Coupons - Issued February 2008

The purpose of this release is to explain the Ohio sales tax treatment as to the use of a coupon issued by the U. S. Government to purchase a television converter box.

All television broadcasting in the United States will be transmitted by digital signal beginning February 17, 2009.  Any analog television without a cable or satellite hookup will no longer be able to receive television programming after this date.  In order to continue to receive programming on an analog television, a converter box will have to be purchased and connected to the analog television.  

To help defray the cost of the converter boxes, the U.S. Government is offering up to two coupons, each worth up to $40.00, to each U.S. household.  Each coupon will be in the form of a plastic card, which the resident will give to the retailer to receive up to $40.00 off the purchase price of each converter box.  Only one coupon may be used per converter box purchased. The coupon cannot be used to pay the sales tax that applies to the price of the converter box.

When coupons are distributed by a third party and the third party reimburses the vendor for the value of the coupon, the price for tax purposes is the selling price of the item sold before application of the coupon amount.  The retailer will compute the sales tax on the original selling price of the converter box, before deduction of any coupon value. The customer will pay the remaining balance due on the price of the converter box, if any, and the sales tax computed on the original selling price of the box.

Example 1:
Selling price of the converter box:  $55.00
Sales tax at 6.5%: $3.58
Subtotal:      $58.58
Less coupon:         $40.00
Customer pays:       $18.58
 
Example 2:  
Selling price of the converter box: $35.00
Sales tax at 7.0%: $2.45
Subtotal: $37.45
Less coupon: $35.00
Customer pays: $2.45

 

Additional information regarding the TV converter box program can be obtained from the Web site www.dtv2009.gov or by calling 1-888-388-2009.

If you have any questions regarding the sales tax or this information release, please contact Taxpayer Services at 1-888-405-4039, or e-mail us through our Web site: tax.ohio.gov.

OHIO RELAY SERVICES FOR THE
HEARING AND SPEECH IMPAIRED
Telephone: 1-800-750-0750