State of Rhode Island - Division of Taxation

Sales and Use Tax

Regulation SU 87-52

Gift Certificates

The sale of gift certificates is not taxable, but when the owner of a gift certificate receives tangible personal property by use of such a certificate, or a part thereof, the transaction is a sale and taxable as such. For example, if the owner of a gift certificate valued at $100 purchases a $25 item, tax computed on $25 must be collected by the retailer and remitted to the Tax Administrator.

R. GARY CLARK
TAX ADMINISTRATOR

DATE: May 1, 1987