Tax issues associated with adopting retail "price match" programs

Retail & Consumer Products Quickbrief

Due to advancements in technology, customers are able to compare prices on most retail products with relative ease, and the recent downturn in the economy has provided them with the motivation for doing so. As a result, many retailers are adopting flexible "price match" programs in order to foster customer loyalty, remain competitive, and grow their businesses. These retailers should ensure that they understand the potential federal and state tax issues associated with such programs, including applicable methods of accounting, sales tax collection requirements, and information reporting and withholding obligations. A thorough understanding of the issues will help retailers properly account for their price match programs and avoid compliance problems upon audit.



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