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Here in Michigan it wouldn't be double taxation because we aren't charged tax on ebooks or other digital goods. But how would they justify charging tax on a digital gift card for digital goods? It's kinda like asking a Walmart cashier to break a $50 bill and getting back 50 minus whatever your local tax is. The sales tax (if there is any on whatever is bought) should only come out when an actual purchase is made. Not on the item used to make the purchase.
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