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Extreme Couponing Tip: Coupons and Taxes

Extreme Couponing Tip: Coupons and Taxes

“Are you taxed before or after coupons are taken into account?”

You are responsible for sales tax before the coupon discounts, even when you get the item for free. If your total is $10.00 before coupons and you have $8.00 in coupon savings, you’re usually responsible for any applicable tax on the $10.00 subtotal. The exception is if your state does not charge sales tax on either food or non-food items.

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33 thoughts on “Extreme Couponing Tip: Coupons and Taxes”

  1. Tyler.R says:

    No that is not correct retailers are not allowed to charge you before coupons in Pa it’s state law and walmart is getting sued over it

  2. I have a question which goes along with this- My family is currently receiving food stamp benefits, and we coupon. When we use coupons, we sometimes end up owing a small amount of cash (usually less than $1 no matter how much we spend). I’m okay with paying that, but was wondering if anyone knew why we sometimes end up owing at some stores (Publix, Piggly Wiggly and Food Giant) but never end up owing at Walmart.
    We seperate out the food and non-food items so that we avoid confusion. I read on here that the registers sometimes have issues with coupons and EBT when you buy food and non-food items with coupons.

    • I’m in Alabama and have the same problem. Every store except Wal-Mart rings up coupons (even for food items) as taxable. So if you use a $1 off coupon, you have to pay sales tax on that $1. I’ve questioned it at every store, because the store doesn’t have to pay taxes on food items sold through Food Stamps, so the store is just pocketing the money. They tell me that’s just the way the register rings it up. Once at Walgreen’s I had a manager adjust it so there was no balance owed. Like you, I don’t “mind” paying the tax on my coupons because I’m still saving money, but it is the reason I only buy food products at places like that if they have rewards for it.

    • I’m in Alabama and have the same problem. Every store except Wal-Mart rings up coupons (even for food items) as taxable. So if you use a $1 off coupon, you have to pay sales tax on that $1. I’ve questioned it at every store, because the store doesn’t have to pay taxes on food items sold through Food Stamps, so the store is just pocketing the money. They tell me that’s just the way the register rings it up. Once at Walgreen’s I had a manager adjust it so there was no balance owed. Like you, I don’t “mind” paying the tax on my coupons because I’m still saving money, but it is the reason I only buy food products at places like that if they have rewards for it.

  3. Anonymous says:

    That is awesome. I wish I didn’t have to pay taxes. Our tax is 9%, even on food items, so even free items aren’t free.

  4. Kristi Fulton says:

    So funny that you posted this. I just moved from UT to TX. In UT, I always paid taxes on the before coupon total. So, I always had some OOP cost, no matter what. In TX, I have left CVS happy so many times (first of all cause I love CVS and wish they had had one in UT) because I walked out not having to pay anything because they tax on the after coupon price! Nice unexpected thing!

  5. Kristi Fulton says:

    So funny that you posted this. I just moved from UT to TX. In UT, I always paid taxes on the before coupon total. So, I always had some OOP cost, no matter what. In TX, I have left CVS happy so many times (first of all cause I love CVS and wish they had had one in UT) because I walked out not having to pay anything because they tax on the after coupon price! Nice unexpected thing!

  6. Kristi Fulton says:

    So funny that you posted this. I just moved from UT to TX. In UT, I always paid taxes on the before coupon total. So, I always had some OOP cost, no matter what. In TX, I have left CVS happy so many times (first of all cause I love CVS and wish they had had one in UT) because I walked out not having to pay anything because they tax on the after coupon price! Nice unexpected thing!

  7. Kaska Okula says:

    Correct me if I’m wrong but isn’t this a proof that when store runs BOGO sales and you want to use 2 coupons for dollar off and cashier tells you that you cant becouse you are getting one item for free you should be able to use it any way? My thinking was – since I’m in store( not some charity place) that means I’m buying it and I do have to pay sales tax(even for a free item) that means I’m buying two items not one?! Right?

  8. i have never once been charged the tax on the pre-coupon balance, whether manufacturer or store cpns. and i watch the tax reduce with each cpn they scan, again, for ecbs/+ups/RRs/catalinas as well as store cpns, AND manufacturer cpns.

    i think perhaps.. many store’s registers might not total properly? i dunno.

  9. i have never once been charged the tax on the pre-coupon balance, whether manufacturer or store cpns. and i watch the tax reduce with each cpn they scan, again, for ecbs/+ups/RRs/catalinas as well as store cpns, AND manufacturer cpns.

    i think perhaps.. many store’s registers might not total properly? i dunno.

  10. Anonymous says:

    I’ve noticed some states do tax on the precoupon total and some do after the coupons…. it depends on the state… i’m in NC right now and they have 8 cents tax…. and they tax the precoupon total so i normally have to pay SOMETHING

  11. Squiggy Flop says:

    funny they never charge me tax when items are free. maybe CT’s laws are different. i have bought all sorts of things, rings, candles, cake, candy, dish detergent, cough drops, medicines, ladies products, and makeup.. whenever something was free with coupon it was free of tax too. very strange

  12. Squiggy Flop says:

    funny they never charge me tax when items are free. maybe CT’s laws are different. i have bought all sorts of things, rings, candles, cake, candy, dish detergent, cough drops, medicines, ladies products, and makeup.. whenever something was free with coupon it was free of tax too. very strange

  13. Anonymous says:

    Where I live in Southern California the sales tax is 8.75% so it gets expensive even on a bunch of free items.

  14. Anonymous says:

    Where I live in Southern California the sales tax is 8.75% so it gets expensive even on a bunch of free items.

  15. Anonymous says:

    Where I live in Southern California the sales tax is 8.75% so it gets expensive even on a bunch of free items.

    • Anonymous says:

      I too live in SoCal but the sales tax reduced by a percent about 2 months ago…still high but a nice drop.

  16. O Bernardi says:

    I have only paid tax on what I owe on final total.. in PA. if I owe 0 then I even if there was tax on the item. I purchase a fan using all store coupon and paid 5.00 and what ever the tax was on that amount.

  17. Amanda Smith says:

    TX Charges taxes after coupons even manufacturers coupons! Like the free Nivea Body Wash awhile back.. I didn’t have to pay a penny in taxes either!

  18. Abby Craig says:

    I live in MO and I am new to paying sales tax (I came from Oregon where there was no sales tax). The only thing I have figured out about sales tax here with regards to coupons is that at CVS when I use EB’s it reduces the tax I owe on my order. I dont know why but I like it!

    • Anonymous says:

      In Missouri you only pay taxes on your total after coupons, so loving it :-)

    • Anonymous says:

      In Missouri you only pay taxes on your total after coupons, so loving it :-)

      • SuzanaD says:

        yes, ONE of the great things about living in missouri… besides the bipolar weather of course! ;D (although i must say today was beautiful!) i live in the STL area and i love CVS shopping… love getting the total to 0 and getting everything for free and without taxes! :D

  19. Amanda Silvia says:

    Except I don’t have to pay taxes all the time. If something is on sale for $1 and I have a $1 coupon, I don’t pay any taxes. There are many times when I have a $0 balance. It would only be if the item is on sale for $1.50 or something, and I have a $1 coupon. Then I pay taxes, but I’m not sure if it’s on the entire amount or only what’s not covered by the coupon. (I live in Massachusetts, where we do have a state tax, by the way.) I like not having to pay tax on free items. Otherwise they wouldn’t be free!

  20. Candice C says:

    Even though this is true in Connecticut, most stores that I shop at tax me on the after coupons subtotal. I think these stores might absorb the cost of tax to entice customers to stay loyal, possibly…? Any other take on that?

    • Squiggy Flop says:

      you know i was wondering the same thing the other day. i too live in ct.. i thought maybe it was the state that made a funny law but then i was checking out of cvs and the screen said i owed 12 cents but the manager told me i was good to go, and to come again.. so maybe you are right.. not sure though

    • Squiggy Flop says:

      you know i was wondering the same thing the other day. i too live in ct.. i thought maybe it was the state that made a funny law but then i was checking out of cvs and the screen said i owed 12 cents but the manager told me i was good to go, and to come again.. so maybe you are right.. not sure though

  21. The exception, at least in the state of Georgia, is with store coupons, including when a store doubles coupons. For instance, if I go to Publix and buy $10 worth of groceries, and have $5 worth of coupons, and they all double, I am taxed only for the amount of the manufacture’s coupons. Make sense?

    KLC: I actually wrote about this back in July, may I post a link here?

  22. You pay the tax on the before Man coupon price. But if you have a store coupon you pay the tax on the after coupon price. Think of it this was, the store coupons are a special sale price. So you don’t pay tax on the reg price of an item if its on sale. But with a man coupon the item’s real price never changes, part of the cost is just deferred back to the manufacturer and the store still has to pay taxes of the full price.

    • Anonymous says:

      I just found this out last week when I was taxed on only $7 (amount after Target Qs) instead of the full original $30.
      Good explanation :)

  23. We are responsible for the taxes on the precoupon total with the exception of medications and most foods

  24. Pam Bischoff says:

    Thanks for the info. I’ve been trying to figure out the answer to this question for a week.