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Gift cards are very popular as birthday, anniversary, and holiday gifts, and for good reason…
They virtually guarantee that your money will end up buying something the recipient will like.
If you plan to buy gift cards to give away as gifts (or even to purchase something for yourself), make sure the cashier doesn’t try to charge you sales tax on the purchase of the card.
The sales tax on the monetary value of the gift card is charged when the recipient ultimately uses the card to make a purchase, therefore no state in the U.S. charges sales tax on the purchase of the cards themselves.
This applies to both gift cards for shopping at local retail stores and as well as the ones you use with online retailers like Amazon.
A couple of state legislatures have tried to pass laws at various times that would allow their states to charge sales tax for gift cards sold in those states, but luckily they failed to pass. If they had passed that would have required consumers to pay double taxes on every purchase they made with their card(s).
If you are asked to pay sales tax anyway (and it does happen in error on occasion), ask the cashier to remove the tax from the total due. If he/she is unable to do so on their own, ask them to seek the assistance of a manager.
As I said earlier, this error is definitely made on occasion because I’ve had it happen to me. Don’t let it happen to you!
Bonus tip: Click here to learn how to avoid the many “free gift card” scams that are making the rounds at the moment.
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