Q: Are restaurant gift cards or certificates taxed? Gift card recipients will also pay tax when they redeem the card.
I just bought gift certificates at a local restaurant and I was charged the tax. When I asked the cashier she said that is how we do it. Now when I give this gift the recipient will also pay tax when they purchase their meals. Double taxing does not seem right.
A: As a former restaurant owner myself for over 34 years, I have never heard of this practice and we certainly never charged a meals and rooms charge in advance of a purchase. The meals and rooms tax is usually charged at the time the meals and drinks are purchased, and then they can be deducted from the gift certificate amount, not paid for in advance before and meals or drinks are ordered. You can call the attorney generals civil department to have them look into this very unusual practice further.
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