State of Rhode Island - Division of Taxation
Sales and Use Tax
Regulation SU 87-110
(a) Redemption of -- Where trading stamps are given by merchants to their customers in connection with the sale of merchandise, the number of such stamps being determined according to the price charged for the merchandise so sold, and such stamps are later redeemed by such customers for other merchandise, the sales tax applies to the redemption and the amount thereof is computed on the basis of the dollar value of the stamps which has been established for such redemption purposes.
(b) Sale of -- The sale of such stamps by trading stamp companies or other similar promoters to merchants is regarded as the sale of intangible personal property and the sales tax does not apply to those sales.
(c) Cost of -- The cost of the trading stamp itself to the trading stamp company or other such promoter, as well as the cost of other materials such as booklets, catalogues, etc., purchased by the trading stamp company, promoter or merchant in connection with a redemption plan is subject to the sales or use tax when brought in Rhode Island or outside this state for use herein.
The term "trading stamp" wherever used in this ruling shall also mean and include coupons and other similar devices.
R. GARY CLARK
DATE: May 1, 1987