Your client, HillTop, is a retailer of women’s clothing. It has increased sales during the holiday season by advertising gift cards for in-store and online use. HillTop has found that gift card holders who come into the store tend to purchase good that total more than the amount of the gift card. Further, about one-third of the gift cards never are redeemed, thereby yielding cash to the company without a reduction of inventory. What are the tax issues confronting HillTop related to the gift cards?
Answer:
The tax issues of a corporation selling huge amounts of gift vouchers to expand sales during the holiday season are as per the following:
The enterprise or corporation should pay annual tax on the gift vouchers sold also .since there is no reduction in the stock ,they should pay tax as property tax on the rest of the stock . While they may have an enlarge of sales ,they should pay tax on the gift vouchers just as the stock that remaining parts.
Your client, HillTop, is a retailer of women’s clothing. It has increased sales during the holiday...
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