TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, March 26, 2012

24 States Move Towards Taxing Groupon

GrouponForbes, 24 States Moving Towards Decision on Taxing Groupon, LivingSocial Deals, by Janet Novack:

When you use a daily deal coupon from Groupon, LivingSocial or’s AmazonLocal at a neighborhood store or restaurant, what amount should you pay sales tax on? The face value of the coupon? Or the far smaller amount (typically 50% of face value) you paid for your deal when you bought it on the Internet? The answer matters to consumers, local merchants and the daily deal industry. Say you pay $50 for $100 worth of goods. With local sales tax rates now averaging 9.6% nationwide according to Vertex, Inc., imposing the tax on the full $100 would add $9.60—or 19.2%—to the cost of a deal, reducing its appeal.

More than a year ago, I reported that the states, by and large, had yet to consider how to tax the burgeoning deal-of-the-day business. Now the 24 states that are part of the Streamlined Sales Tax Use Agreement are devising a uniform policy—one that the group’s Governing Board could adopt as early as its next meeting in late May.

Tax | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference 24 States Move Towards Taxing Groupon: