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DC: Prepaid Debit Cards Don’t Equal Sales Tax Exempt

  • Jun 11, 2014 | Gail Cole

 Dupont Circle

It’s not uncommon for educational institutions to offer prepaid debit cards to students, faculty and staff. These debit cards allow holders to make purchases at most on-campus locations and at select locations in and around DC. They’re convenient.

Yet the District of Columbia Office of Tax and Revenue reminds that purchases made with prepaid debit cards are not inherently tax-exempt. In other words:

“The sales is to be collected on purchases made with these prepaid debit cards to the same extent that the tax would be collected on the same purchases made with cash, credit cards or commercial debit cards.”

Taxable goods are still taxable. Exempt goods are still exempt (OTR notice).

How does your business manage sales tax?

photo credit: Kodamakitty via photopin cc

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.