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Are gifts or rewards for being a good customer taxable?

Forum|Forum|3 years ago
March 31, 2023
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Draftkings gives rewards to folks that bet at different levels. I assume that they are for customer retention. These gifts/rewards can be glasses, show tickets or gift cards. They are not gambling winnings. They do not provide any tax documents either. non-employee Gifts in general are not taxable. Are these?

Not A Product Question

Best answer by CatinaT1

From what you say, I believe this is a Reward that is treated as a rebate for your spending.

Rebates are not taxable on the cash value if it is considered a rebate.

Generally, you do pay taxes on prizes, awards, sweepstakes, raffle and lottery winnings, and other similar types of income as ordinary income, no matter the amount, but I don't think what you are describing is a prize.

CatinaT1Answer

From what you say, I believe this is a Reward that is treated as a rebate for your spending.

Rebates are not taxable on the cash value if it is considered a rebate.

Generally, you do pay taxes on prizes, awards, sweepstakes, raffle and lottery winnings, and other similar types of income as ordinary income, no matter the amount, but I don't think what you are describing is a prize.

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R

redwine2Author

It does seem to be a rebate as it is dependent on how much you spend. It is not linked to bets or lotteries or whether you win or loss.

I've looked through a bunch of tax docs and it doesn't seem like gambling "winnings" or lottery prizes. Any idea where I could find info about rebates?

thanks.