TV Converter Box Coupons (Taxable or Exempt?)
Posted by salestax on July 8, 2008
States keep coming out with rulings regarding the taxability of these coupons being issued by the US Department of Commerce’s National Telecomm and Information Administration. As most of us know, general television viewing will be changed as we know it – from Analog picture to Digital. For people who have not recently purchased new television sets, companies are selling Converter boxes that will allow older sets to still be used when the change happens. To accommodate US citizens for this expense, the government is issuing $40 coupons to be used toward the purchase of these boxes.
I’m going to try to keep a list of the states that issue public releases on how they will treat this coupon… check back occasionally for more updates to this post. Reduces or Does Not Reduce Taxable Price. If your state is listed with “Reduces,” then you should only expect to pay tax on the difference after the coupon is calculated. (example: Price $50, less coupon $40 = $10 x 5% sales tax = $10.50 total paid.) If your state is listed with “Does Not Reduce,” then you should expect to pay tax on the whole amount of the box and then use the coupon off of the total price after taxes. (example: Price $50 x5% sales tax = 52.50, less $40.00 coupon, total paid $12.50.)
If you need a coupon visit www.dtv2009.gov.
For Starters – More added…:
CA – Reduces (thanks for the notice A.L.)
MA – N/A – Cable boxes aren’t taxable. So the coupon is just dollars off purchase price.
NV – Reduces (thanks Ron, I saw this in the newsletter from NV, but never posted – thanks for the reminder!)
PA – Reduces (thanks for the notice A.S.)
UT – Does Not Reduce (thanks Kristin)
The Sales Tax Connection 
Alfredo Sanchez said
Pennsylvania no tax on converter box $40 coupon . . you can update the list
Alfredo Sanchez said
http://www.revenue.state.pa.us/revenue/cwp/view.asp?A=238&Q=283321
Al Lind said
California does not charge tax.
Bulletin issued August, 2008 says
“Consumers who believe they have been overtaxed should take their receipt to the retailer and request a refund of the amount of tax that was overpaid.”
See http://www.boe.ca.gov/news/pdf/L202.pdf
Kristin said
Below is a ruling issued by Utah regarding this:
Click to access 07-014.pdf
Ron said
NEVADA REDUCES – e.g. applies sales tax on net amount AFTER Federal Rebate coupon.
Click to access 0164%20-%20OCT%202008.pdf
REFER TO PAGE 3: “In accordance with NRS 372.325,
coupons issued by the Federal Government under the
“Digital Television Transition and Public Safety Act of
2005,” reduce the taxable base of cable TV converter
boxes purchased with the coupons, by the face value of
the coupon. For example; if the retail price of a
converter box is $49.99, and the coupon issued by the
U. S. Federal Government has a face value of $40.00,
the taxable amount to the purchaser on the sales receipt
would then be $9.99.”
Reid said
To Ron from Nevada. Is the reduction good only from October-on or does it apply to when the Coupons were first being sold in Nevada?
salestax said
Reid: The treatment of these coupons would be from the time the coupons were first being used in NV. But, if a NV resident received one of these coupons and took it to a store in Utah, it would be treated differently (see the UT rule). Hope this helps!
Cash For Clunkers – Taxable or Not? « The Sales Tax Connection said
[…] Since these are starting to get attention, I’ll try to track these as I’m sure they’ll be coming in small waves from most states so that car dealers know how to treat these reimbursements. My guess is that they’ll be treated somewhat like the TV Converter boxes (see those determinations here – https://salestax.wordpress.com/2008/07/08/tv-converter-box-coupons-taxable-or-exempt/). […]
Hemorrhoid Treatment : said
Cable TV is great specially if you got those digital cable boxes that is coupled with TIVO “
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