<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"> <html> <head> </head> <body bgcolor="#ffffff" text="#000000"> Maybe I can help a little here. This isn't a tax issue, it is an accounting treatment. What you owe in taxes is based on your net income. If your accounting is accrual based so that your sale was booked at full price (and stays that way) you would deduct any discounts from that sale to accurately reflect what your net income was from the sale. If you produce invoices through your accounting system this should be the case. But, if you are on a cash basis and just booked the amount you received for the sale (like if you are working out of your checkbook) you wouldn't deduct any discount. Discounts are an adjustment to income, not an expense per se. Like Ron says, bad debts would be treated the same way under the same circumstances. I hope this helps, Steve <pre class="moz-signature" cols="72">-- "The masses have never thirsted after truth. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim." Gustave Le Bon from his 1896 book "The Crowd"</pre> Are you also able to use any discounts you give for the year and     right them off your taxes? Yes, at least maybe.  I'd have to check with my accountant.  But I think it might be some sort of business expense.  But the tax deduction never equals the income you'd have received if you'd have charged the normal price.  Not to say there might be other good business reasons for giving a discount. --  JF No. It's like a bad debt. The non-income is the deduction. Ron N <pre class="moz-signature" cols="72">-- "The masses have never thirsted after truth. Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim." Gustave Le Bon from his 1896 book "The Crowd"</pre> </body> </html>