An Interesting Scam by the State of AZ!
The State Of Arizona is making millions off you and you probably don’t even realize it! This scam is a rather interesting one. Just buy an item using a manufacturer’s money off coupon. Here’s how it goes: Say you bought a mattress set that was originally $500.00. You have a coupon for $50.00 off. What do you have to pay tax on? The tax on the $450.00 that you actually paid for the item, or the original price of $500.00? You guessed the tax on $450.00 didn’t you? WRONG!!! You have to pay the tax on the full $500.00 price! You end paying tax for something that you didn’t pay for. Yes! You get the honor of paying the tax on the $50.00 that you saved with the coupon! Kinda rips doesn’t it?
The interesting part that this is all perfectly legal because of this ADOR rule:
R15-5-129. Discounts, Refunds, and Coupon Redemption
C. When coupons issued by a manufacturer are redeemed by a retailer the amounts refunded to the purchaser are not permissible as deductions from the selling price of articles sold by the retailer. In these cases, the gross selling price is taxable.
It took me a while to find this out as I originally thought that the store was ripping me off. It even took me three calls to the Department of Revenue to find someone who actually knew about this!
This is just the type of thing that needs to be changed. Our government looks very greedy when they do this type of thing. Any Idea how we can fix the problem??? I would love to hear your comments on this!