When I go to a restaurant and they give me a 10% senior citizen discount as an example, should the sales tax be applied to the price before the discount, or to the 10% discounted price?
========================================= MODERATOR'S COMMENT: That depends on the state, and perhaps local, regulations.
The tax should be based on the price after the discount. See any of the Texas Controller of Public Accounts publications.
The actual sales price is the measure of the tax. If the discounted price appears on your sales check, the regular retail price never goes on the restaurant's books and the discount is not a problem. If the discount is taken AFTER the sale has been recorded (e.g., in the case of a discount for prompt payment of an invoice), the seller can deduct it from gross sales when the sales/use tax return is filed. See Tex. Tax Code Ann. §151.007(c)(1) ; Tex. Admin. Code §3.301(d).
Katie in San Diego
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.