I feel as if I know way too much about what’s going on with the Safeway J4U program. Anyway, up until yesterday, if you bought say $20 of taxable groceries and used a $20 off reward, (let’s assume your tax rate is 10%), you’d still have to pay $2 since the $20 reward comes off after-tax is calculated. However, as of yesterday, the $20 reward now gets added before tax is calculated and so your total cost would be $0. I don’t know why it took them so long to fix this, but I’m glad they did.
Quick addendum – I went to a store later on in the day with the old receipt and was charged tax, so it hasn’t rolled out nationwide yet or maybe it’s only rolled out with the new receipts.
The sales tax application on coupons or discounted prices is based on your state law. Check with your states tax bureau to see what the CORRECT procedure is. You may be entitled to past refunds.
Food is not taxed in my state at all except for soda, supplements, and sugary beverages
If you are in WA state, toilet paper is still taxed.