The New York Tax Appeal Tribunal in an appeal by the Apple INC denied the sales tax refund on device sales in gift card promotion.
In this case, the petitioner is the Apple INC, which is a corporation engaged in designing and marketing of the software, electronics, and personal computers, further it also deals in the communication device such as mobile for example iPhone; personal computers such as MacBook, Macbook Pro, iMac, Mac Mini, etc.; portable digital music players such as iPods; device peripherals and accessories such as computer display, etc. There various modes of sales by which the petitioner sold his product i.e. directly or indirectly. The petitioner also launched the Mac App Store in 2011. In order to promote the Mac App Store, the petitioner started ‘back-to-school’ (BTS) in 2012.
As per the terms and conditions applied on the ‘back-to-school’ (BTS) all the qualified educational individuals which include staff, faculty, students, and parents who are living in the U.S.A. were eligible to avail ‘back-to-school’ (BTS) Gift Card on the purchase of any qualified Apple Product at the Mac App Store.
So the issues raised was whether the petitioner has properly collected and remitted sales commenced during 2011 and 2012 in back-to-school or not?
The New York Tax Appeal Tribunal reaffirm the fact which was highlighted by the Administrative Law Judge (ALJ) wherein he addressed the proper procedure for the computation of the sales tax, which is to be made in the ‘back-to-school’ (BTS) Gift card promotion for 2 years. Wherefore, in the light of this the New York Tax Appeal Tribunal held that the sales tax will be applicable on the qualifying purchase as it is impossible to take into account the discount availed under ‘back-to-school’ (BTS) Gift card as some availed the discount of $5 while others $10.
