Iowa Joins Growing List of States Discussing Tax Treatment of Groupons

Tuesday, February 7th, 2012

 
 
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The Iowa Department of Revenue recently clarified the tax treatment of Groupons purchased by Iowa residents. Groupon and other similar programs allow customers to purchase discounted deals that they can later use at local businesses. The Department stated that if the Groupon voucher that the customer presents states on its face the price paid by the customer to Groupon, tax will be collected on that amount rather than the full (non-discounted) price of the item purchased. For example, if the customer purchases $100 worth of clothing and presents the store with a Groupon voucher for $50, tax will only be collected by the store on the $50 face amount of the voucher. However, if the voucher does not state the price paid by the customer for the voucher, tax will be collected on the full price of the item(s) purchased. Using the same example, if the customer presents a voucher for the clothing that does not include the price paid on its face, the customer will be charged tax on the full price of the item, or $100.


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

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