[quote name='manthing']If his state doesn't charge tax when you pay with store credit, GS is having you pay to lessen your spending ability, as you'll get taxed on purchases you make with the GC.[/QUOTE]
No, he said he doesn't like paying $250 for Xbox and $50 for GC, he wants to pay $300 for Xbox and $0 for GC.
If he wanted to pay $250 for Xbox and get no GC I would understand due to your above point, but that's not his argument.