Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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140.0000 BARTER, EXCHANGE, "TRADE-INS"—Regulation 1654

Annotation 140.0028

140.0028 Replacement Not Treated as Trade-In Merchandise. A retailer of motion picture films informed his customers through its price lists that an old or damaged print could be replaced with a new print of the same subject at a 20% replacement discount provided the old or damaged print was returned to the retailer for destruction. When a customer took advantage of this offer, the retailer's billing to the customers showed the list price of the print, the replacement discount, and a net price upon which tax reimbursement was computed. The old or damaged print returned, being of no value to the retailer, was destroyed and discarded. The transaction under the above circumstance did not involve merchandise traded-in as set forth in Regulation 1654(b)(1) and, therefore, the replacement discounts are not includable in gross receipts. 9/28/71.