Personal Finance

Tax (HST) on discounted deals

  • Last Updated:
  • Nov 9th, 2017 1:44 pm
Mar 15, 2011
360 posts

Tax (HST) on discounted deals


I want to understand what tax obligations a business has when they offer an x% discount. I've had situations lately where I've bought a product or service because of a promotion advertising x% off. But, either with warning or without, I get charged tax on the regular, pre-discount amount. Does it make a difference if the deal is offered via an affiliate vs. the store itself?

To clarify here are examples
- I buy a Groupon for a haircut at a salon the terms state that I will have to pay HST on the full amount when I redeem the service at the salon.
- I am ordering food via an app, like Ritual, and it said I got a 20% discount since I ordered after 3pm. Since the app charged me directly, when I later looked at the receipt I realized that I was charged tax on the full pre discount amount.
- I go shopping at a department store where I get a loyalty discount and they are also currently having a sale. This situation checks out - I only got charged tax on the discounted price.

Conclusion: When getting a discount via an affiliate/retailer you probably will be charged tax on original amount? And this 'tax' will actually be remitted to the government?