12A-1.018. Trade and Cash Discounts

(1) The tax is imposed upon the total selling price of tangible personal property sold at retail. Where a dealer quotes the purchaser a list price with a deduction as a trade discount, the tax is to be computed on the list price less the trade discount. A trade discount is an expedient for adjusting list prices and is to be deducted in arriving at the true selling price of the property.

(2) Discounts allowed and taken at the time of sale are deducted from the selling price, and the tax is due on the net amount paid at the time of sale. Discounts granted for payment within a specified period or upon a specified later date are not deemed discounts at the time of sale, and may not be deducted from the selling price for purposes of computing the tax.

(3) A coupon or refund issued directly by the manufacturer is not to be construed as a reduction in selling price by the dealer. In this case, as illustrated by the following examples, the full selling price of the product is taxable.

(a) Example A: An automobile is sold to a customer for $5,000 with a $500 “factory rebate”. The customer pays the dealer $5,000 for the automobile. The buyer in turn receives the $500 refund directly from the manufacturer. The dealer receives $5,000. Tax is due on $5,000.

(b) Example B: A box of soap powder retails for $1.50. The customer applies a “manufacturer’s coupon” worth $.50 toward the purchase of the box of powder. The dealer would collect $1.00 and the full tax due on the $1.50 sale from the customer. The manufacturer would redeem the coupon from the dealer for $.50.

(4) A dealer’s discount is a reduction in selling price if taken at the moment of sale or purchase of a product as illustrated by the following examples.

(a) Example A: An automobile is sold to a customer for $5,000 with a $500 “dealer’s discount.” The customer pays $5,000 less the $500 discount. The dealer receives $4,500. Tax due on $4,500.

(b) Example B: A customer has a coupon issued by the dealer which allows $.50 off the sales price of a box of soap powder which retails for $1.50. The dealer collects $1.00 from the customer along with the coupon. Tax is due on $1.00, since the redemption of the coupon reduces the sales price of the product to that amount.

Rulemaking Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 212.02(16), 212.07(2), 212.12(9) FS. History–New 10-7-68, Amended 6-16-72, 6-3-80, Formerly 12A-1.18, Amended 6-19-01, 7-20-11.