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When is tax charged to the consumer? Before OR after the discount is applied?

Tampa, FL |

I am getting conflicting information on the internet about this. Some sites say that tax is charged BEFORE any discount is applied, some say AFTER a discount is applied. Then some say, if it is a discount offered by the company themselves then tax IS charged prior to the discount. Can someone clear this up for me? Also, is every State different or do they mostly follow the same laws when it comes to this common thing? I ask this because we are an answering service and have read that we must charge certain taxes, such as in Florida we must charge communications taxes, which is outrageous and in some states we only charge sales tax and some we charge nothing. So confusing to service so many States with so different variations of law. Need to be a lawyer nowadays to run a business:)

Attorney Answers 3


Every state is different, which is why the Internet folks are trying to fight paying sales taxes to the states, having to keep track of every comma and paragraph....I have often wondered whether, when taxed on the full amount, whether that extra $ actually makes its way to the Department of Revenue or isn't siphoned off some where.

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Each state is different. You need to comply with each state's laws where you are doing business. Many times you need multiple tax and legal professional that are licensed in multiple states. Best of luck to you.

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As other attorneys have stated, how and when state taxes are charged depends on the particular state's laws. It also depends on what you are selling. You mentioned in your fact pattern "communications taxes" which usually apply to telecommunication services -- which adds another layer of complexity to your case. Consider engaging a local tax attorney to assist you in negotiating these matters because sales taxes and communications taxes are charged on different things and reported on different forms.

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