K-Mart, Gift Cards and Taxes

i would fight it!! but i'm in california, what state are you in?? Per CA law, sales tax is not charged on the value of a gift certificate (it is after all an intangible item and sales tax is applied when acquiring a tangible item). Having said that, I do not know what other states do; it depends on where the gift certificate was purchased. I would talk to a manager. I had a similar situation occur because the website did not know how to stop the sales tax from automatically being charged during check out. http://parents.berkeley.edu/advice/holidays/giftcertificates.html

Personally I would go back and question this tax on the card. I have bought many gift cards and have yet to pay tax on the card. It is basically cash, not an item. Maybe they will call it a handling fee if you confront them. Some places will charge a handling fee which I feel is also wrong. HAPPY POSTINGS FROM GRANDPA BOB !!~

I totally agreed with Polly #8 response. Think about it if you pay tax on the gift card and your God Son spends the money on a shirt, CD, or whatever naturally you can expect he will have to pay tax on his purchase like anyone else would. BUT... Because she and I could be wrong I phoned Canadian Tire (Yes I forgot to remind you I do live in Canada) and Canadian Tire said you do not pay tax on the gift card. Because I live in Canada I called wal Mart because I know they're American owned and world wide so I called wal Mart and asked them and the answer was the same No you do Not pay tax on a gift card. You had a crappy cashier that didn't know what she was doing. I would definately show your reciept to the manager. I'm sure you won't go broke over the 2.02 but the thing is just think how much revenue this brings in if in fact they do that to most or all customers??? Thanks for the post it had me going ha ha ha.

make sure you tell them you paid taxes, because they shouldn't have to pay sales tax again - or that's double taxes

Wow! Although I am not surprised...stores will try anything it seems. I would have made a big deal about it so others could have heard and know and then I'd a told them to forget it, I'll take my business elsewhere. Then I'd a gone home and created a personalized gift card and stuck the cash in there with a piece of string "attached" to the envelope to indicate it was to be spent at Kmart only since that is where you godson wanted it for. I get so tired of these "service fees".. At my apt complex the new management started sending out statments for our rent AND the utilities we have to pay saying that instead of paying all different vendors - water/sewer/trash and then rent seperately, we would now just have to make out one check for all!! Yippee - they say there were trying to make things easier on us!! That was 3 months ago and this month, without a mention, they are now charging us $3.00 "service fee"..to make things easier on us! So I am going to write them a check for the rent and another one for the utilities...at least I'll get my $3.00 worth!

You're right in your thinking, Cats. I've never heard of anyplace making you pay for a gift card! I get gift cards all the time from MyPoints. The points needed to purchase the gift card are the exact amount they make me pay... nothing is added for taxes! I buy gift cards for my friend's two sons, who think of me as their "aunt", every Christmas. Usually, it's for places like McDonald's or Burger King because they love the occasional 'treat' of going there and eating. I buy these cards at WalMart and have NEVER paid taxes on them. In my opinion, something should be done about K-Mart's policy regarding the taxing of gift cards! IF they say they are charging for the actual "card", that piece of plastic, then I'd say they are WAY overcharging for that tiny plastic card. Taxes are indeed paid at the time of purchase FROM the gift card. They are taxing you twice, which is illegal (unless it's our government double-taxing us, of course). My advice is to (1) never buy gift cards from them again (offer to take your Godson shopping yourself or give him $30.00 in cash) and (2) report this to the Better Business Bureau and to any consumer advocacy group you can find. This is unbelieveable. I bet K-Mart has found some loophole that allows them to get away with this. I find it despicable.

They will be charging double taxes on that money. When the card is used there will be taxes too, that just isn't fair. I never paid attention when buying gift cards so I don't know if I have had to pay taxes or not. I would call Kmart and ask them, maybe they have a good answer.

I think it is a scam they are running on the public in general. You are correct, you pay taxes on the money when you spend it off of the gift card. K Mart is basically indulging in double taxation.

That is crazy! It may be a fee to have it activated. They do this at our mall if you get a visa gift card. They charge $2 for activation. I never get them because I feel like it is just throwing that $2 away. Now when he uses the card, does he have $30 or $32.02 on it?

I have never heard of this before, either, and I wouldn't be too happy. I have seen "activation fees" before of outrageous amounts for generic Visa, American Express, or MasterCards, for example, of $4.95 or whatever, but I have never heard of paying TAX on a gift card! How many times ARE we going to get taxed anyway? (Sales tax, income tax, GIFT CARD TAX?, etc etc.....)

Hey cats! I think that you now have to pay taxes when you purchase gift cards because they look at it like it is a purchase of something! Since the person who is going to use it then won't have to pay the taxes I guess? I'm not sure, but I think I have paid taxes when I got gift cards too and not just from KMart! I think that is how it is these days! They will tax anything they can get away with taxing!

that does not make sense to me. because when your God-son uses the gift card he will have to pay taxes on whatever he buys.. that is just wrong....

In my home country, we don't need to pay taxes on purchasing anything but in United States, tax tax tax... It took me a while to accept it. Last week, me and my husband went to a amll to get him a new suit, when we were paying, the cashier said "$$$ and $$$ taxes" We were like"huh?" then the cashier told us yeah when the purchased over $175, it costs you luxurious tax... it's ridiculous to me...