35 Miss. Admin. Code Pt. IV, Subpt. 2, Ch. 02 — Prizes, Premiums, Gifts, Coupons, Rebates, Discounts, Buy Downs, and Trading Stamps

Trading Stamps
100 Statutory Authority
101 Miss. Code Ann. Section 27 -65-3(h) defines gross proceeds of sales to include amounts
received by the seller from a third party if:

# 1.

The seller actually receives consideration from someone other than the purchaser
and the consideration is directly related to a price reduction or discount on the sale;

# 2.

The seller is required to pass the price reduction or discount on to the purchaser;

# 3.

The amount of the consideration that is attributable to the sale is fixed and
determinable by the seller at the time of the sale; and

# 4.

One of the following criteria is met:
a. The purchaser presents a coupon, certificate or other documentation to the
seller to claim the price reduction or discount and the coupon, certificate or
other documentation is authorized, distributed or granted by a third party and
the third party will reimburse the seller;
b. The purchaser identifies himself or herself as a member of a group or
organization entitled to a price reduction or discount (a preferred customer
card available to any patron does not constitute membership in such a group);
or
c. The price reduction or discount is identified as a third party price reduction or
discount on the invoices or receipt received by the purchaser or on a coupon,
certificate of other documentation presented by the purchaser.
102 Miss. Code Ann. Section 27 -65-3 provides that gross proceeds of sales also includes the
value of property purchased at wholesale that is withdrawn or used by the business for
use in the business or for any other purpose by the business or owner(s).
103 Miss. Code Ann. Section 27 -67-5 levies a use tax on the use, storage or consumption of
tangible personal property in this state.
104 (Reserved)
200 Prizes, Gifts, or Premiums
201 Persons purchasing property or withdrawing property from inventory to be given away,
awarded as prizes in games and contests of chance or skill or distributed for advertising
purposes are regarded as the user or consumer of the property and the regular retail sales
or use tax applies.
202 The purchase price of goods ordinarily bought for resale but subsequently given away or
used must be included in the gross sales of the purchaser and the regular retail tax paid.
The value of a gift received from an out-of-state donor is subject to use tax.
203 When a person sells tangible personal property and simultaneously includes other
tangible personal property as a premium or gift to the purchaser as a part of the same
transaction, the selling price is deemed to include all items to which title passes as the
time of sale.
204 (Reserved)
300 Coupons, Rebates, Discounts, and Buy-Downs
301 Coupons that may be used at any store location and that are reimbursed by the
manufacturer of the merchandise are called manufacturer's coupons. Merchandise
purchased in whole or in part by manufacturer's coupons is taxable on the full selling
price because the amount of the discount is known, the purchaser has taken an affirmative
action to claim the discount and the seller will be reimbursed by the manufacturer for the
amount of the coupon. Price reductions given through the use of seller's loyalty cards or
preferred customer discount cards are treated as manufacturer's coupon when the
discount is identified on the cash register tape as a manufacturer's discount and the seller
is reimbursed by a third party.
302 Coupons that can be used only at a particular seller, store or chain of stores are called
store coupons. Merchandise purchased in whole or in part by store coupons is taxable on
the selling price less any discount allowed for the coupon because the seller is not
reimbursed by any third party for the amount of discount. Price reductions given through
the use of seller's loyalty cards or preferred customer discount cards are treated as store
coupons when the seller does not receive any reimbursement from a third party.
303 A rebate given by the seller is considered to be a discount deductible from the selling
price when shown on the invoice and is exempt because the seller is not reimbursed by
any third party for the amount of the rebate.
304 A rebate made directly by the manufacturer to the purchaser or to the seller, or assigned
to the seller by the purchaser is taxable as a segment of the selling price because the
amount of the rebate is known at the time of the sale, the rebate is identified as a
manufacturer's rebate on documentation received by the purchaser and the rebate is
directly related to the sale.
305 Any discount offered by a seller to all members of a particular group are taxable when the
seller receives a reimbursement from a third party and the members of the group are
required to identify themselves as a member of the group eligible for a discount.
306 Buy down programs are those programs where a manufacturer enters into an agreement
with a seller to provide the seller with a discount for each qualifying sale or purchase of a
particular product. The retailer passes the discount through to the customer. The buy
down received by the seller is not taxable unless the customer presents some type of
documentation to the seller to claim the discount or the discount is identified as a third
party discount on the invoice received by the purchaser.
307 (Reserved)
400 Trading Stamps
401 The transfer of property through the exchange or redemption of coupons, trading stamps
or other thing of value is a transaction in which title of property passes and constitutes a
taxable sale. The regular retail rate of tax applies to the stated value of the stamps or
coupons or the retail value of the merchandise received, whichever is greater, regardless
of whether redeemed by the store originally issuing the stamps or by a merchandise
redemption center.
402 Trading stamp firms maintaining a redemption store in Mississippi are not liable for sales
tax on the cost of merchandise for resale. Trading stamp firms distributing or selling
trading stamp programs in this State are liable for the regular retail rate of sales or use tax
on the cost of stamps, stamp books, catalogues, signs, stamp trays, and other supplies for
use in this State.
403 Trading stamps redeemed at points outside this State are subject to use tax, and if the tax
is not collected and paid by the out-of-state redeemer, it accrues to the person in this State
receiving the property.
404 (Reserved)
500 Prepaid Discount Voucher Programs
501 Prepaid discount voucher programs are programs in which merchants advertise
promotional deals and discounts through a third -party, online marketing agent, such as
Groupon and Living Social. The promotional deals or discounts are offered as a voucher
that the customer purchases for a percentage, usually fifty percent (50%) or less, of its
face value or the value of the goods or services that may be redeemed with the voucher.
The customer can use the voucher like a gift card toward the purchase of goods or
services from the merchant. No tax is due on the sale of the voucher. The tax at the
regular retail rate must be collected by the merchant for the full sale price of the goods or
services, including the amount covered by the voucher, or on the amount that would
normally be charged for goods or services redeemed with the voucher.
502 Reserved
35.IV.2.02 revised effective December 1, 2018