SPOKANE VALLEY, Wash. — Whether it's a holiday, a birthday, or a thank you - most of us have purchased a gift card at some point.
For most purchases, the price on the card is what you pay, however, one viewer reached out to the KREM 2 Verify team for answers after he was taxed on a Roblox gift card he bought for his grandson on Amazon.
THE QUESTION
Do you have to pay tax on a gift card at the time of purchase?
THE SOURCES
THE ANSWER
The answer to whether you need to pay tax on a gift card at the time of purchase needs context.
Generally, gift cards are not taxed at the time of purchase.
However, gift cards for certain digital goods are taxed in Washington at the time of purchase. This includes gift cards for in-app purchases or in-game currency.
Also, while Washington collects taxes on digital goods, not all states do.
WHAT WE FOUND
According to The Washington Department of Revenue, general gift cards are not subject to sales tax at the time of purchase since the card is not for a specific item or service. Taxes would only be collected when the gift card is used.
For gift cards on digital goods, like Roblox, an online game, it would fall under a Washington state law that requires tax to be collected at the time of purchase.
The Department of Revenue said, "Sellers would collect the sales tax -- for instance, sales of access to online games or items within the game, that are subject to sales tax.”
Amazon determines the sales taxes based on the state laws where the purchase was made. Amazon lists the following items as some that could be subject to tax:
- Ebooks
- Movies
- Music
- Single episodes or seasons
- Photograph services
- Magazine and Newspaper Subscriptions
- Digital Gaming
- In-Game Currency
- Gaming Subscriptions
- Home Security Subscriptions
If you have something you’d like KREM 2 News to verify, send an email to: verify@krem.com
DOWNLOAD THE KREM SMARTPHONE APP
DOWNLOAD FOR IPHONE HERE | DOWNLOAD FOR ANDROID HERE
HOW TO ADD THE KREM+ APP TO YOUR STREAMING DEVICE
ROKU: Add the channel from the ROKU store or by searching for KREM in the Channel Store.
Fire TV: Search for "KREM" to find the free app to add to your account. Another option for Fire TV is to have the app delivered directly to your Fire TV through Amazon.
Apple TV: Search "Spokane News from KREM" in the Apple store or follow this link.
To report a typo or grammatical error, please email webspokane@krem.com.