This reminds me of the way some game shows used to be, Wheel of Fortune I think was a one example. Contestants would earn show “dollars” good for selecting items from various rooms if they won. I wonder how happy many of the winners were at the end of the year when they realized room the room full of bathroom products like towels and soaps “worth” $1000 was going to cost them like $300 in additional taxes. If they had simply been given the money they would never have spent it on such junk.
I imagine it’s the second, because otherwise how would they know they paid $40 in tax for these shirts. I’m guessing they get a line item on their check showing them getting “paid” $40, and then that amount get deducted back post-tax.
Winnings on game shows and lotteries are tax-free over here. Win £20million and you get it all to spend on booze, drugs and sex or waste it if you want.
Our company used to give out $50ish gift cards at the Holidays. When absorbed into a larger corporation, they had to change the gift to something up to $25, and that gift card became a box of chocolate. Not a welcomed change.
My Jeopardy prize was a week in a resort including a budget for airfare and rental car. Since the resort was 60 miles from my house, and 40 miles from the nearest airport, flying there would have been a bit tricky. So, I didn’t spend the travel money, but I still got taxed on it.
those taxes are why a lot of game shows give cash its also why most game shows don’t film in CA anymore
I met one of the old price is right girls at a car show and she said that 80 percent of the people who won anything on the show took t cash equilivent that they have to offer by ca law
sort of like how you win the lottery and take the one time payout they have a version based on the value of your prizes and you get that in a check or cash
At one my jobs, we’d get $50 gift cards (I think Starbucks or Jamba Juice) at Christmas from our manager’s boss. We’d then see a $15 tax deduction on our next paystub. The thing is I don’t drink Starbucks or Jamba Juice and end up giving the card away. So I end up paying $15 for my gift!
I had a similar problem with my Jeopardy! prize, but I asked the show to give me a letter saying that I didn’t use the full value of the airline ticket, and included that with my tax form, and wasn’t taxed on it. Sorry no one suggested that to you.
It’s quite likely the company was able to buy the cards at a discount, so they gave away $50 gift cards that only cost them $40 each. Retailers are often willing to sell large lots of gift cards for below face value, knowing they’ll make it back in the value of unused cards (aka breakage) anyway.
