The Illinois Department of Revenue (Department) issued General Information Letter (GIL) ST 12-0009-GIL (Feb. 28, 2012), which states that retailers that sell “deal-of-the-day” vouchers must collect and remit sales tax on the amount a customer pays for the voucher if the retailer can identify such amount. Otherwise, the retailer must collect and remit the full value of the “deal-of-the-day” item sold. The Department stated that it is in the process of preparing a bulletin to explain the tax treatment of deal-of-the-day websites, but it issued this GIL using guidance provided at a practitioners’ meeting on February 2, 2012.
The taxpayer in ST 12-0009-GIL requested information regarding the taxability of a prospective business venture similar to GroupOn, a popular website that sells vouchers redeemable for items sold by retailers at a discount. The Department provided several examples of how a typical GroupOn-type transaction should be treated for Illinois sales tax purposes when a customer purchases a $25 voucher redeemable for $50 of food at a retailer.