The New York State Tax Appeals Tribunal (TAT) held that Apple improperly collected sales tax on sales of Apple computers and iPads because it discounted the purchase price by the amount of gift cards it gave to customers as part of a back-to-school promotion.  Under New York tax regulation, the amount of a discount of a store-issued coupon, where a third party does not reimburse the store, is not included in taxable receipts. 20 NYCRR 526.5(c)(3). Moreover, according to guidance issued by the Division of Taxation, gift cards are not subject to sales tax at the time of transfer; instead, sales tax is imposed when the gift card is exchanged, in whole or part, for an item subject to sales tax. See NY St Tax Bulletin TB-ST-806. The TAT agreed with the New York State Division of Tax Appeals that Apple did not meet its burden of proving that the promotional gift card was purchased at the same time as the qualifying device. Rather, the promotional materials implied that receiving the gift card was the direct consequence of purchasing a qualifying device. As a result, the TAT concluded that Apple should have charged sales tax on the full price of the device without discounting for the value of the promotional gift card.

Apple Inc., DTA 827287 (N.Y.Tax.App.Trib. 2019).