Coupons and sales tax: Know the rules
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Pennsylvania's tax code allows retailers to deduct coupons from the price of taxable goods and then apply sales tax only to the lower, adjusted price. That results in customers paying less sales tax.
The tax break applies to coupons for low-cost items in the grocery store as well as to coupons used on more expensive goods, such as a toaster oven, refrigerator or two-for-one restaurant deal -- as long as the coupon is for a specific item.
Coupons offering money or a percentage off an entire purchase don't reduce the tax bite because they aren't for a particular item.
Mail-in rebates don't count, either, because they don't reduce the purchase price of an item at the time of the sale.
People who believe they have been overcharged on sales tax should return to the store and ask for a refund, said Stephanie Weyant, spokeswoman for the Pennsylvania Department of Revenue.
Alternatively, Pennsylvania residents can request a refund from the revenue department by filing an appeal online at www.revenue.state.pa.us or by completing a paper form Rev-65, which can be downloaded at the site.
Consumers may have a hard time winning a sales tax appeal, however.
They'll need a receipt with a detailed description of the coupon and the taxable item to which it applies. A receipt that simply says "manufacturer's coupon," isn't enough.
"They will have to be able to prove what item the coupon applied to," Ms. Weyant said.
For questions about filing an appeal, call 1-717-783-3664. For a list of taxable and non-taxable items in Pennsylvania, visit www.revenue.state.pa.us and search for "Retailers' Information Guide."
First Published December 20, 2009 12:00 am