In the state of Nevada, the sales tax laws can be very confusing. If you want to look something up, you’re going to be going through quite a few NRS (Nevada Revised Statutes) to find what you need. One of the questions I get a lot from retail client’s is, do they apply the sales tax before or after a discount or coupon?
It’s pretty straight forward actually. If you’ve created an in-store discount, the tax is on the discounted price. Such as, you have a sale on an item that normally costs $100.00, you discount that item 15% to $85.00. $85.00 x 7.725 =$6.57. The total on the sale, including sales tax is $91.57.
If you’ve mailed out a coupon for $10.00 off an item worth $100.00, you must charge sales tax on the full value of the item before the coupon discount.
Example: $100.00 x 7.725=$107.73 – $107.73 – $10.00=$97.73. You can not take $10.00 off the price then charge sales tax, you must tax the full $100.00 then deduct the coupon discount. This is because the Nevada Department of Taxation considers the coupon to be of actual monetary value, therefore taxable.
It’s up to the business owner how they want to handle discounts. Just remember, as long as it’s an in-store discount, you tax it after the discount. If it’s a coupon the customer brings in to redeem for the discount, the tax is on the full value of the item before the discount is applied from the coupon.
If you have any questions please feel free to contact me at (775) 225-0893, or firstname.lastname@example.org.