A certificate without an expiration date remains valid until redeemed or replaced and must be redeemable in cash.
However, a card, code, or other device is a gift certificate if issued in a specified/pre-denominated amount that can be applied to a specific good or service (e.g., "redeemable for a spa treatment up to 50 or a specific value is stated (e.g., "a.Tags: British Columbia, GST (General), HST (General), Law/Cases, orst (General), Ontario, Place of Supply Rules, Record-Keeping, Risk Management, Services, Tangible Personal Property, Taxable, Tips, Type of Supply, gift card, gift certificate.However, when a person uses that gift certificate to purchase goods and/or services, the gift certificate is money.The Ministry of Consumer Services advises consumers to check their gift card receipts to ensure they are not charged sales taxes when buying gift cards.Until then, franchise systems offering coupons (including through daily deal offerers like Groupon and LivingSocial) should understand the potential application of federal and state laws and structure their coupon programs to minimize the risk of violating these laws.Comments: comments powered by Disqus.The law provides that a gift certificate constitutes value held in trust by the issuer on behalf of the beneficiary.This means that when a vendor sells or issues a gift certificate, no GST or HST is payable because the GST/HST Legislation says no supply has occurred. .The law exempts sales of gift certificates in which the purchaser is not charged until the certificate is used (Mass.If there is no supply, there is no event that results in the application of GST/HST.It may be possible to issue coupons with a stated cash value and a short-term expiration date if structured to take advantage of the promotional certificate exclusion.Consumer protection; January 14, R-0043, gIFT certificate laws, by: Daniel Duffy, Principal Analyst, you asked if any state regulates the sale of gift certificates.
She practices primarily in the area of domestic and international franchising, licensing, and distribution transactions.
New York requires the terms of the gift certificate to be clearly and conspicuously printed on the certificate itself.
Even though there isn't a similar explicit rule for Ontario retail sales tax purposes, Ontario has the following statement on an official web-site: Consumer Alert Gift Cards - Retailers Charging Sales Taxes.This is important because I also saw a flyer yesterday for the sale of gift cards in June 2010 to save HST. .Retailers must not charge consumers provincial Retail Sales Tax (RST) and/or federal Goods and Services Tax (GST) when buying gift cards.The determination of whether property, which otherwise would qualify as a gift certificate, has an intrinsic value will require a certain degree of judgment on the part of departmental officials applying this policy.Generally, if the coupon is structured in this way, the purchase value (i.e., the amount paid for the coupon) will not expire, while is discount tire in georgetown open on sunday the promotional value (i.e., the amount in excess of the purchase value) will.The question is what happens for GST/HST/orst purposes when one sells the gift certificate and when one redeems the gift certificate for goods/services.Based on this official statement, it appears that the position of the province of Ontario is that Ontario retail sales tax is not collectible at the time of a sale or issuance of a gift certificate/gift card.