The DOR has stated that the sale of a "qualifying promotional voucher" which may be later redeemed for taxable property or meals is not subject to sales tax if it (i) clearly states both the time limited promotional (face) value and the amount paid by the customer for the voucher, and (ii) remains valid for redemption for at least the amount paid by the customer indefinitely. The DOR reasoned that the sale of vouchers issued by third parties should be treated like gift certificates at the time of sale; thus tax is due when redeemed, not when issued. However, when the customer uses the voucher, the amount paid by the customer for the voucher plus any additional cash or other consideration paid to the vendor by the customer is subject to tax. Massachusetts DOR Directive 12-4.

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