When Is Revenue From the Sale of Gift Cards Taxed?

摘要

Gift card arrangements have become very complex because unrelated third parties are now accepting gift cards for redemption. Businesses selling gift cards issued for services are allowed to defer revenue for up to one tax year following the sale of a gift card (as long as the agreement to provide services does not extend beyond two years). Sales of gift cards for goods is more complicated; while the income can qualify for deferral by certain accrual taxpayers, there are several different factors that affect that deferral. The IRS's position on when gift card income can be deferred has evolved over time so that accrual method taxpayers are allowed a limited deferral of income from advance payments for gift card sales, assuming they can successfully navigate the maze of rules.