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TheCompany, LLC is a Groupon type service that offers local business discounts in the form of a redeemable voucher.

I, TheCompany.com will offer a platform that businesses can make "Daily Deal" type offers that will be purchased by customers from "where-ever". My profit comes from taking a % of each transaction but keep in mind I'm not actually selling the product.

I make a commision off the sale of a product.

For example:

A customer could purchase a voucher on TheCompany.com to eat one slice of pizza for $1 at Sal's Pizzeria. The customer then presents the voucher to Sal's Pizzeria and receives the slice of pizza.

The Kinds of Questions I Have:

  • Do I need to include sales tax as a part of that transaction?
  • Can I make Sal's Pizzeria responsible for managing that on their own?
  • If the customer was out of state, how do taxes change?
  • If the customer was in state, but purchased a voucher from a business out of state, how do taxes change?
  • Do I need a state business lisence for every state that participates in TheCompany.com?

My Main Concern:

This is intended to be a scalable solution. TheCompany.com platform has an expectation for growth that will reach businesses and customers nationally over time. I do not want to worry about tax laws in the event that customers buy or use vouchers from different states.

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2 Answers

up vote 1 down vote accepted

I'm a State Tax consultant who has covered the Groupon sales tax issue extensively. I don't usually posts links in comments, but will here because I think you may find some of my information helpful. Here are two articles I've written specifically on Groupons and sales tax. You can also link to more of my articles/blog posts on Groupon and Sales Tax from within these two articles.

"Groupons & Sales Tax - New Guidance for Small Business", http://www.allbusiness.com/finance/taxes/16707138-1.html

"As We Wait for Massachusetts, More States Issue 'Groupon Sales Tax' Guidance", http://www.thestateandlocaltaxbuzz.blogspot.com/2012/01/as-we-wait-for-massachusetts-more.html

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up vote 1 down vote

According to this article:

http://www.hodgsonruss.com/Home/News_Seminars/Articles_and_Alerts/TaxingGrouponTypeCouponsNewYorkTaxDepartmentGuidance

"The technical memorandum makes clear that no tax is due, ever, on the sale of a certificate."

So to answer my own question groupon type service vouchers are never directly responsible for the sales tax on purchased goods.

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