Troy Department Stores offers employees discounts on merchandise carried in the store. Newly hired employees receive a

Question:

Troy Department Stores offers employees discounts on merchandise carried in the store. Newly hired employees receive a 10% discount. The discount rate increases 1% each year until employees have 20 years of service when the discount rate is capped at 30%. What tax issues should Troy and the employees consider?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...