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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4545
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Our company is starting to offer two different promotional

Customer Question

Our company is starting to offer two different promotional items in our Texas branch: 1. Buy one get one free. 2. Purchase $1,000 or more in product and receive a 10% discount. On the BOGO offer, do we charge the customer sales tax on the item they are
receiving for free? On the 10% off promotion, is the customer liable to pay tax on the original amount or the reduced amount? Thank you for your assistance!
Submitted: 2 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 2 years ago.
Dear Friend, Hello and welcome. Thank you for providing an opportunity to assist you. Let me come straight to the point. In BOGO offer, you DO NOT collect sales tax from the customer for the item he is receiving free. For example, if he buys a pack of food for $6.95, and gets another box worth $9.95 free, he ONLY PAYS sales tax on $6.95 ONLY. On the 10% promotion amount, the customer pays tax ONLY ON THE REDUCED amount. For example, if he buys $100 worth of goods, then under the promotion offer, he is billed $90 and he pays sales tax on $90. The underlying theory is that sales tax is charged on the actual sales made. I am sure this would help. I wish you good luck. You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,