Community Forum

Loyalty Points and Sales Tax

We’re planning to start using loyalty points, and will be billing our customers for them (a la club), to use on bottles. However, we have tasting rooms in two different states, and want to know if anyone else has experience with how this would work.

In Oregon, with no sales tax, we simply bill, $50 is added to the customer’s loyalty points balance, and is then redeemed for the flat retail price of bottles.

In California (we assume), we’d bill $50 flat without sales tax (since no item is being purchased), then when the customer comes in to redeem their loyalty points, they pay the tax assessed on their wine. Assuming the customer purchases wine in excess of $50, they pay the tax and difference in cash/on card. This would be similar to buying a gift card - you aren’t taxed twice.

Can anyone confirm this assumption is correct?