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Sales Tax on Rewards Points Purchases

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  • Sales Tax on Rewards Points Purchases

    Could use a little help on this.

    The problem appears to be as follows: We are required to charge sales tax on in state sales. When a customer redeems a product on the website the website is calculating the shipping on the product but it is NOT calculating the sales tax. This is huge as we will be paying sales tax to the state on the redeemed products, yet the customer is not charged the sales tax.

    Example: Customer uses rewards points to pay for a $325 item on the store. Store lets customer checkout paying just the $12 shipping. It did not charge the $22.75 in sales tax that we will be paying the state on the order.

    What am I missing here? Is there a workaround?

    Cheers,

    Scott

  • #2
    The workaround is not to enable products for rewards, and only offer Reward Gift Cards. Customers can use these as payment methods, and the order is calculated normally with shipping and sales tax.
    I think the problem with the setup you mention, is that the rewards discount the item to $0.00, so there will be no tax due.

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