We get this question a lot. Here’s some information on when you may or may not be asked to pay tax on a gift card.
Do I pay tax when I buy a $50 gift card?
No. If you bought a gift card for a specific dollar amount, you don’t pay tax on the gift card. The tax is charged when the card is used to buy a taxable item. For example, you would pay tax on a jacket you buy with a gift card.
Do I pay tax on a gift card for a specific good or service?
Yes. Usually, if you buy a gift card for a haircut, massage, or any other specific good/service, the business will account for the tax on the gift card. So, if you buy your mom a gift card for a manicure, you will likely be charged the tax for that service when you buy the gift card.
Simply put, the tax will be charged at some point during the transaction because businesses are required to charge it.
Who do I talk to if I have questions?
While we do oversee certain aspects of gift card laws (like expiry dates and what fees can be charged), we have no authority when it comes to taxes.
If you have questions about PST, contact the BC Ministry of Finance:
- Toll free: 1.877.388.4440
- Email: CTBTaxQuestions@gov.bc.ca
For questions about GST and HST, contact the Canada Revenue Agency:
- Phone: 800.959.5525
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About Consumer Protection BC
We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.
Shoppers Drug Mart is charging PST on Microsoft Xbox gift cards even though PST is charged later on the online products/services purchased with that gift card.
Other retailers including London Drugs and EB Games do not charge PST on these gift cards.
Hi Will, thanks for reaching out to us. Our understanding about this topic is that the XBOX pre-purchased cards are not actually gift cards but money towards a subscription service. With these “cards” you’re paying the tax at the time of purchase and are not taxed within the account itself. If you are getting taxed twice I believe that would be something that the Ministry of Finance could provide information on – their contact info is shared above in the blog post. If you believe the card you bought was a gift card and you would like to speak with us for additional clarification, you can reach us at 1.888.564.9963. I hope this is helpful and best of luck!
Shoppers Drug Mart charged 7% PST on Netflix gift card.
Hi WEI, thanks for reaching out to us. As you may have seen in my response above, our understanding about this topic is that these kinds of pre-purchased cards are not actually gift cards but money towards a subscription service (Netflix, XBOX, etc.). With these “cards” you’re paying the tax at the time of purchase and are not taxed within the account itself. If you are getting taxed twice I believe that would be something that the Ministry of Finance could provide information on – their contact info is shared above in the blog post. If you believe the card you bought was a gift card and you would like to speak with us for additional clarification, you can reach us at 1.888.564.9963. Thanks!
Shoppers drug mart charged me pst for purchasing an Xbox gift card (not to be confused with the Xbox gold subscription card) When you purchase items from the Microsoft online store you are taxed. I am being charged tax twice. Could you suggest what might be done about this?
Hi Vikki, thanks for your question and for the clarification around the types of Xbox cards. If you look at the post, there’s a section called “Who do I talk to if I have questions” and you should see two contact options depending on the type of tax being charged. Best of luck!
I was charged tax when purchasing two mastercard “perfect gift” gift cards. No doubt there be taxes levied when buying stuff with these. Sound right?
Hi Glen, thanks for your question. When you purchase a prepaid purchase card (which is different than a regular gift card) you will typically be charged an activation fee. If you were charged tax, that would be something you should contact the referrals we listed under the “who do I talk to if I have questions” section, depending on which tax you were charged. I hope this helps and best of luck!
7/11 charges PST on Nintendo gift cards, this is not correct, I will use the cards to purchase a video game of the Nintendo eshop that also charges tax on the purchase, not cool, being taxed twice
Hi Max, with regards to PST charges, you may want to contact the province directly. While we oversee parts of the gift card law in BC, PST charge is outside of our jurisdiction. I found contact information (both email and toll free number) at the bottom of this page on BC government’s website. I hope they will be able to assist you.
Shoppers Drug mart has absolutely no clue how any of this works.
They are charging PST on gift cards with dollar values (not to be confused with subscription services). I have tried many times to purchase cards and told there was PST, however walking across the street to London Drugs, Saveon or Walmart you can purchase the same cards without the PST.
Shoppers is charging PST on cards where the PST is also being charged by the vendor itself from the balance of the cards.
Hi Bob, thanks for sharing that with us here. If you are getting taxed twice I believe that would be something that the Ministry of Finance could provide information on – their contact info is shared above in the blog post. They are the folks who handle issues around PST. I hope this helps and thanks again for contacting us.
Shoppers Drug Mart in West Vancouver is charging PST on gift cards, except for their own Shoppers gift cards. This is ridiculous and someone from the Enforcement from BC Consumer Protection should be asking the Shoppers Regional Office about this practice. Cash grab
Hi Michael, thanks for sharing your concerns with us here. As you may have seen in previous replies from me, if you are getting taxed twice on a gift card (once at time of purchase and then when you use the card), that would be something that you should contact the the Ministry of Finance about – their contact info is shared above in the blog post. They are the folks who handle issues around PST – not our organization. I hope this helps and thanks again for contacting us.
Shoppers Drug Mart charged me PST on a Netflix gift card. I realized later and went in to a different Shoppers to ask if I was charged PST incorrectly. The manager told me that what was clearly marked as PST on my receipt was actually a service charge that Shoppers charges. So yeah, I’d say it’s a cash grab.
Found this post on BC PST Bulletin.
https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-311-promotional-materials-special-offers.pdf
PST 311 Promotional Materials and Special Offers:
Gift Cards and Gift Certificates Generally, you do not charge PST on a purchase of gift cards or gift certificates because it is a purchase of store credit a customer may redeem later. When a customer redeems the credit, PST applies to the purchase as if the credit were cash. PST will apply if the item purchased is subject to PST. However, certain types of gift cards are subject to PST if they can only be used to purchase taxable telecommunication services or software. For more information, see Bulletin PST 105, Software, and Bulletin PST 107, Telecommunication Services.
PST 107 Telecommunication Services
Examples – Taxable:
-A gift card that provides the right to download five movies from a streaming media service.
-A gift card that provides access to a database of videos that the purchaser can stream over the Internet for a specified period of time
PST 105 Software:
Examples – Taxable:
-A gift card that provides access to an online video game for a specified time (e.g. $30 for a 60-day online gaming card)
-A gift card that provides a specified number of “points” that can be redeemed online only to download software (e.g. apps) or provide access to online software (e.g. video games).
Who Knew?
Hi Winston, thanks for sharing that. Good information to have.
My daughter was charged provincial tax on a Google Play gift card. The retailer says it’s head office policy and refuses to refund her. Do we have any recourse?
Hi Louise, thanks for your question. Do you know for certain that she will be charged PST again when she uses the card? If so, if you check out the blog post above there’s a section called “Who do I talk to if I have questions?”. Under that section there is a contact from the Ministry of Finance who can address issues around PST. Be sure to document all the elements of your transaction, including your communication with the retailer and your receipts. I hope this helps and best of luck
I purchased a gift card for a local gaming centre (like virtual reality, computer etc). I asked for $40 and the place charged me GST on top of the denomination. It wasn’t for a specific thing at the place. Just money to use there. Now if I check and $42 isn’t on the gift card, how should I go about informing them of their mistake?
Hi Marcie, thank you for asking a question! You can certainly go ahead and check the gift card balance with the business. If the balance is only $40 you can chat with the manager and ask them to change the amount – it was probably an honest mistake. It would be helpful if you have the receipt to show them that you were charged GST. If the card has $42, then make sure that they don’t charge you tax when you purchase an item. It’s up to the business how they handle these types of mistakes but the key in any situations would be to talk to the business directly and try to resolve the issue. I hope this helps, Marcie!
Shoppers drug mart are crooks why am I paying tax on Xbox gift cards then later paying tax when I use the gift cards on my Xbox it’s ridiculous can someone please do something about this I thought I was the only one who noticed this but I guess everyone is getting double taxed.
Hi Tyler, thank you for reaching out. Please note that we took out some swear words you had in your original comment as our blog policy states that no offensive or disrespectful language is allowed. Regarding taxes on gift cards, we do hear about retailers charging taxes when a card is purchased and again when the recipient goes to spend it. There’s no government organization that specifically oversees this part of law, so you may have to talk to the store directly, perhaps a manager. I’m sorry that there’s no easy solution to this but you seem to be aware of the issue and having the right information is important in these instances.
Why is Shoppers Drug Mart the only store charging PST on gift cards? The government should be stepping in here.
Hi Yvonne, thanks for your question. You can check out the blog post above and there’s a section called “Who do I talk to if I have questions?”. Under that section, there is contact info for the Ministry of Finance who can address issues around PST. Be sure to document all the elements of your transaction, including your communication with the retailer and your receipts. I hope this helps and best of luck!
Walmart is now charging PST on itunes cards.
Question about Service Fees: Are these allowed to be charged on a gift certificate? Its not necessarily a tax, but is it allowed if its charged on the purchase of the gift card and then charged a second time on the transaction that that gift card is being redeemed for?
Hi Emily, thank you for your question. Were you charged service fees for a shopping mall card or a regular gift card for a certain dollar value? In BC, shopping mall cards are allowed to add service fees but not others. We have more information about this on another blog post here. If you think you were charged fees unnecessarily, please feel free to submit a complaint to us. You can do that online using this link.
7 11 is charging tax on steam gift cards what’s you with that?
Hi Liz, thanks for reaching out to us. Our understanding about this topic is that pre-purchased cards like Steam Gift Cards are not gift cards but money towards a subscription service. With these “cards” you’re paying the tax at the time of purchase and are not taxed within the account itself. If you are getting taxed twice I believe that would be something that the Ministry of Finance could provide information on – their contact info is shared above in the blog post. If you believe the card you bought was a gift card and you would like to speak with us for additional clarification, you can reach us at 1.888.564.9963. I hope this is helpful and best of luck!
Steam cards are money you can spend towards games and other things. So like a prepaid visa. Not like a xbox gold subscription. And Steam charges taxes when you buy games from them. The same with google (and thus google play gift cards)
My son was charged 7% PST when he bought a Steam card at 7-11 this afternoon. I went back and asked why was there a tax but the staff there did not know either except the system automatically adds the PST when the card is scanned. I understand taxes are paid upon purchased if the gift card is for a subscription service, but Steam prepaid card clearly ins’t a subscription service. I’m going back to talk to the store manager tomorrow to figure it out.
Hi Dan, thank you for leaving us a comment here. We are not too familiar with specific gift cards such as a Steam Card but if you are not able to get a good answer from the store manager, you may want to contact the BC Ministry of Finance – the contact number is listed on this blog post.
Senior care co. buying a grocery gift card then add that amount to their hourly bill. Then tax the total amount.
3x $20hr. = $60 For services shopping, care …
1x $200.00 grocery gift card.
$60 + $200 = $260 + 5% = $273.00
Is this allowed?
Hi John, this doesn’t seem right but you may want to check in with the senior care service company. It may have been a mistake on their part. As this blog post suggests, a seller should not add taxes to gift cards for a specific amount. I would suggest talking to the company directly.
Can someone let me know if they can charge tax on a Apple Card for buying gaming when the game already charges tax
Thank you
Hi Ruth, thank you for getting in contact with us. If you look at the post, there’s a section called “Who do I talk to if I have questions” and you should see two contact options depending on the type of tax being charged. Best of luck!
Walmart charges PST on itunes cards and when I go to buy enhancements like diamonds or gems to play in my games I am charged again.
I just purchased a $50 iTunes card from Walmart and was charged tax. When I purchase a song through iTunes I am taxed again. We have never been taxed for iTune cards from any other retailers such as Staples, Canadian Tire, London Drugs, etc. Why is Walmart able to tax me on this purchase? Not impressed that I am paying tax twice. Thanks!
Hi Laurie, thank you for contacting us. While we oversee certain aspects of the gift card law in BC, taxes on these cards are outside of our scope. Ministry of Finance might be the best resource for you and their contact information is listed on the blog post above. I have also found some information that may be helpful to you. This PST Bulletin has an example (page 8) – “A gift card that provides the right to download five movies from a streaming media service is taxable.” But it also states “If part or all of the amount on a gift card can be used to purchase non-taxable items such as images or electronic books, then the gift card is not subject to PST.” I believe you can purchase audiobooks with an iTunes card so it may be PST exempt. Either way, it’s probably best to inquire about it with Ministry of Finance. I hope this helps!
I am not impressed either. It is not right.
Walmart is charging $3.50 taxes on a $50 Apple gift card. And refusing to refund it. Was directed to speak to Apple, who has nothing to do with this. London drugs, superstore etc all do not charge taxes on a gift card.
The government should look into this, especially now that it’s the gift giving season
Hi Donna, thank you for sharing your experience with us. We do oversee some aspects of the gift card law in BC but not the tax part. Ministry of Finance has the authority over sales taxes and you can report suspected non-compliance with them online or over the phone. This page on their website has the information (on the sidebar on the right, if you’re viewing on a desktop computer). I hope this is helpful to you!
Why can walmart charge tax on a gift card? When questioned they had no answer but proceeded to charge tax!
Hi Laura, thank you for sharing your experience with us. We do oversee some aspects of the gift card law in BC but not the tax part. Ministry of Finance has the authority over sales taxes and you can report suspected non-compliance with them online or over the phone. This page on their website has the information (on the sidebar on the right, if you’re viewing on a desktop computer). I hope this is helpful to you!
We were just at 7-11 and they charged us $1.25 tax on a $25 Valorant gift card. This card is used to buy items in the online Valorant store, which charges us tax on those online purchases. This is so frustrating! It sounds like we have to go back and argue with a clerk who won’t know anything about the tax laws and has a system that is doing this automatically. Such a pain for the consumer. And in this case, 7-11 is the only store selling these particular cards.
Hello Anna, thank you for sharing your experience here. We do oversee some aspects of the gift card law in BC but not the tax part. Ministry of Finance has the authority over sales taxes and you can report suspected non-compliance with them online or over the phone. This page on their website has the information (on the sidebar on the right, if you’re viewing on a desktop computer). We have had other consumers reaching out to say that 7-11 is charging taxes so hopefully, if the Ministry is alerted, they will be able to educate the business.
I was just in at a 7-11 in Surrey attempting to purchase a STEAM giftcard (STEAM is a digital storefront for purchasing & downloading video games and charge TAX at the time of purchase), and the 7-11 was insisting on charging the TAX and refused to remove the tax even after I showed them this webpage and the Government webpage stating that giftcards are tax-exempt. I have reported to the BC Government.
Hi Daniel, sorry to hear about your experience but I am glad you have reported it to the government.
Same. I bought 2 $50 Steam Cards and paid $107. The receipt is labeled General (no tax) for $107.. its not even separated explanations of what I paid for. 7-11 on Corner of #10 Hwy and Fraser Hwy. I needed it so I let it go but I won’t fill up my gas tank there again.
Hi Gerald, thanks for posting your experience on our blog. As you may have seen in other replies, we do not oversee the tax aspect of gift cards in BC. Ministry of Finance has the authority over sales taxes and you can report suspected non-compliance with them online or over the phone. This page on their website has the information (on the sidebar on the right, if you’re viewing on a desktop computer). Thanks again.
A local beauty salon is charging 5% tax on their gift cards. When I used to gift card I was also charged 5% – is this not double dipping? The company is taking 5% twice
Hello and thanks for posting your question. The article explains when taxes should be charged but if you purchased a gift card worth a certain dollar amount ($50, for example) then you don’t pay taxes at the time of purchase. But if you bought a gift card for a haircut or manicure service, you would pay tax. Either way, it should only be charged once. You may want to talk to the beauty salon first to let them know of the rules, but if you are still having issues, you can contact the BC Ministry of Finance. The contact information is in the article. I hope this helps to clarify things!
I find it completely shadey that my local Walmart and 7-11 charge tax on XBOX gift cards. If they are not supposed to I really question how they are able to. Our Superstore does not so I will continue to support there and share with friends. And so on and so on and so on.
I purchased a $15 gift card for old navy at 711 and noticed after it was given as a gift that there was 14 cents removed from the balance for “tax”. It’s a small amount but I’m very confused on what tax that would be and why it was even there in the first place?
Hey there, thanks for your question. If you are getting taxed twice for a gift card (at the purchase of the gift card and at the time of using it), this is something that needs to be brought to either the BC Ministry of Finance or the CRA. You can find their contact information listed in the blog post above. I hope this helps!