Is there sales tax when you buy gift cards?

[cmaee]

I am strongly thinking of just buying my out-of-state nieces and nephews gift cards this Christmas. I figure that it will be a huge savings on shipping and that way they can get what they really want...I am not incredibly close to them, so I don't know what there likes and dislikes are. Anyway, when you buy gift cards, are you taxed on them? It seems like you would be taxed double when you use it....ie. you are taxed when you buy the gift card and then when a purchase is made that purchase is taxed too.

 

[wdwstar]

no sale tax on purchasing GCs

 

[Dizneydaz]

That's right, no tax on the cards themselves. Then when purchases are made they will be taxed (exempt for tax exempt items.) Like you said if you paid sales tax on the card and they paid tax on their purchases, it would be double taxation.

If you are thinking of getting bank gift cards make sure they don't charge a monthly fee or an inactive fee. Most of them have eliminated them but some may still charge. Also, there may be some out there that charge you a fee to get one. Stay away from those.

 

[wdwstar]

if you order GCs on the internet you will be charged shipping charges. If you purchase visa's, american express or any other credit type cards you will be charged an activation charge no matter how much the GC is worth anywhere from 4.95 per GC to 9.95. Credit GC cards a bad choice, they are like cc if they purchase something that is more then what is on the ccs some will charge you over the limit fee, fees to check your balance (not online), fees if you dont use it in so many months. not worth the hassle.

if you get a credit GC i usually go to a store and purchase their GC for the amount that is on the credit GC.

 

[traveljunkie2]

Watch out for the Visa gift cards. They charge a fee, depending on the gift card amout. I think the fee is about $5 for a $25 card, $7 for a $50 card. But if you buy a card for a specific store, there should be no fee.

 

[cmaee]

Thanks for the responses. I was planning on getting the gift cards to stores...Wal-Mart, K-Mart, Toys R Us. I figure they can at least something that they want at those stores.

 

[minniemair]

Store gift cards are a great idea. My elderly great aunt sends my DD's Target gift cards each year and we take a pic of them with their purchases and send it with the thank you note. She loves seeing what they bought and feeling included. My girls are teens now, but we've been doing this for about 10 years now.

 

[JamieW]

Store gift cards are a great idea. My elderly great aunt sends my DD's Target gift cards each year and we take a pic of them with their purchases and send it with the thank you note. She loves seeing what they bought and feeling included. My girls are teens now, but we've been doing this for about 10 years now.

That's a really good idea. I love gift cards, but I've read posts from people complaining about gift cards being too impersonal, but that's a great way to make it more personal.