When a sale is made subject to cash or trade discount, the gross proceeds actually derived from the selling price are determined by the transaction as finally completed. A sale is made subject to a discount when the sales price is reduced under terms known to the buyer and seller at the time of the sale, and the price reduction occurs at the time of the sale or within a time agreed and understood by the parties at the time of the sale.
The selling price or sales price of a service or article of tangible personal property does not include bona fide discounts actually taken by the buyer. The amount of bona fide discounts may be deducted only if the amount has been included in the gross amount reported. Discounts are not deductible when the retail sales tax is based on the selling price or sales price before the discount is taken and no portion of the tax is refunded to the buyer.
A discount voucher is an instrument redeemed by a customer from a seller at the time of purchase that:. For additional information that may apply see subsection 3 of this rule. A The purchase of a discount voucher prior to redemption is not taxable. B The seller of a product or products purchased using a discount voucher must include the amount the customer paid for the discount voucher in the gross proceeds of sales or gross income of the business, as the case may be.
C If a discount voucher is redeemed by a customer for a product subject to retail sales tax, then the amount paid by the customer is included in the taxable sales price of the product. D The seller may not deduct advertising or similar expenses fees paid to the discount voucher provider, even if the discount voucher provider "nets out" those expenses fees before remitting the payment to the seller.
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Sellers must be able to substantiate, through documentation, the amount the customer paid for the redeemed discount voucher and any discount applied to the sale. A If a discount voucher indicates the amount the customer paid, the seller must include that amount in the sales price of the product purchased.
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B If the seller, through its agreement with the discount voucher provider, knows the amount the customer paid for the discount voucher, that amount is to be included in the sales price of the product purchased. C If the seller does not know at the time of sale the amount the customer paid to obtain a payment instrument and thus does not know whether the instrument is a discount voucher, the seller must treat the consideration paid by the customer as equal to the face value of the instrument. A cash discount is an incentive for the buyer to pay the seller's invoice price of goods or charges for services on or before a specified date.
Mann's Lumber Shop Mann's sells construction material to Ken, who builds sheds for resale. Discount deductions are allowed under the extracting or manufacturing classifications only when the value of the products is determined from the gross proceeds of sales. No discount is available if tax is computed by other means authorized by RCW Cash discounts are not deductible for retail sales tax purposes when the seller collects the tax on the selling price before the discount is taken and no portion of the tax is refunded to the buyer. Example 5.
Mann's sells Richard all materials needed for a shed that Richard wants to build for extra storage. Richard neglects to take advantage of the offered discount even though he pays the full invoice within ten days.
Example 6. Mann's sells George all the materials needed for a shed that George plans to build for storage.
Retail stores' coupons are issued by retail stores and redeemable only at that store or at affiliated stores of the chain. The coupons offer a reduced price for a specific item upon presentation at the store. Bona fide discounts do not include discounts on the selling price to the buyer, when the buyer is required to perform a service to receive a discount.
Examples of services that may be required include advertising, shelf placement of product, special in-store displays, and hiring product demonstrators to promote sales. Grocers sometimes receive discounts, allowances, slotting fees, or free product from manufacturers if the grocers provide shelf space for new products or advantageous shelf space for display of the manufacturers' products.
Grocers' product placement or slotting activities in exchange for consideration from manufacturers constitute business transactions. Manufacturers' or distributors' coupons offer a reduction in price of a specified amount on the customer's purchase of specified items. The manufacturer or distributor will redeem these coupons when they are turned in by the seller. Redemption is usually at full face value plus a small handling charge. In this case, the seller actually receives the full retail price for the item sold.
Tax is due on the full retail price. Manufacturers sometimes make rebates available to buyers. Normally the buyer pays the seller the full purchase price for an item, and then sends requested documentation with a rebate claim form to the manufacturer. The rebate is sent directly to the buyer. A cash payment by the manufacturer to the buyer has no effect on the selling price of the sales transaction that occurred between the seller and buyer.
The measure of the tax remains the total consideration paid or delivered to the seller by the buyer. Automobile manufacturers routinely run sales promotions offering a rebate or cash payment directly to the buyer. As an alternative to direct payment, these programs may allow the buyer to assign his or her right to the rebate to the selling dealer.
To stack coupons efficiently and to avoid spending unnecessary time in the store, it is always a good idea, while still at home, to make a shopping list and then match the items with coupons. You will want to check your coupon binder for coupons that you have already collected.
The goal is to find a store coupon and a manufacturer coupon for the items on your list. If you need other manufacturer coupons, visit the " Best Websites With Printable Grocery Coupons " article to find additional coupons. It is also helpful to do an online search for the name of the item, followed by the word "coupon.
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Check the terms of the coupons you plan to redeem. If the coupon requires that you buy three items, adjust your list accordingly. Once you have finished matching coupons, separate the store coupons from the manufacturer coupons. Separating the coupons in advance will help when it comes time to check out. You are now ready to go shopping. Remember to stick closely to your shopping list. Coupons tend to stick together. When you are redeeming store and manufacturer coupons only, most couponers present all of the store coupons first, followed by the manufacturer coupons.
In some situations, particularly when loyalty programs are involved, doing it this way will increase savings. After you are comfortable matching store and manufacturer coupons on the items listed on your grocery list, try advancing to the next level. It is very easy to do and has the potential to improve your grocery savings significantly. The goal of this step is to buy items that are on sale and stack each one with store and manufacturer coupons.
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Here are the steps to take:. It is designed to encourage shoppers to try various products by offering cash rebates in return. It does not matter if you purchase the item using coupons. You will still get the same cash rebate. The final cost? You will make 74 cents plus two cans of soup. Stacking coupons does not just help you save at the supermarket.
Department stores often run extra discounts if you shop on specific days. This is when shopping the final clearance racks can really pay off. Save even more by paying for purchases with the in-house credit cards, which often include additional savings. Malls also offer coupon books with money-saving coupons for select stores. When you sign up for the clubs, you get announcements on special shopping days when you will receive additional savings.