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The Taxability of Social Coupons in Wyoming

  • Oct 12, 2012 | Gail Cole

The Wyoming Department of Revenue has weighed in on the sales taxability of social media coupons such as Groupons and LivingSocial.

Vendors from restaurants to outdoor outfitters use social media coupons to draw customers to their businesses. Wyoming has determined that the purchase of the voucher is not subject to sales tax. However, sales tax must be collected when the coupon is redeemed.

The example provided by Wyoming's Department of Revenue News Letter is as follows:

A restaurant sells a $100 voucher for $50 through an online company such as Groupon. Sales tax is not collected on that transaction.

The customer uses the coupon to purchase $100 worth of goods at the restaurant. When the coupon is redeemed at the restaurant, the restaurant owes sales tax on $50. The sales tax may be charged to the customer. Any amount charged for the creation or distribution of the coupon by the online company may not be deducted from that amount.

The vendor (the restaurant in this instance) is not reimbursed by the online company for the difference of the value of the goods sold ($100) and the value of the goods bought ($50). Furthermore, the online company is not required to pay sales or use tax on the fees it charges for the creation or distribution of the social media coupon.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.