Why will a store coupon make an item eligible for the exemption but a manufacturers coupon or rebate will not?
Tax is due on the total consideration received by the store for the sale of merchandise. “Consideration” is not limited to money given by the customer, but also includes other valuable items. A manufacturer’s coupon is a valuable item and part of the consideration received by the store, because the store will be reimbursed by the manufacturer. Therefore, the coupon does not reduce the selling price of the item. However, a store coupon or discount actually reduces the sales price of the item, because the store does not receive any additional compensation for the store coupon. For example: A customer buys a purse for $55 and the store is offering a discount of 20%, the selling price of the purse would be $44, and the purse would be exempt. However, if a customer purchases a purse for $55 with a manufacturer’s coupon of $15, the selling price of the purse would be $55 and it would be taxable. The $15 coupon is part of the valuable consideration paid for the purse, which consideration is r
