Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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R

460.0000 REIMBURSEMENT FOR SALES TAX—Regulation 1700

Annotation 460.0130

460.0130 "No Sales Tax" Promotions. Several times a year a retailer conducts "no sales tax" promotional sales events where the customer pays no sales tax reimbursement and is only charged the amount on the sale tag. The retailer is contemplating posting promotional signs in the store that will read "all prices of taxable items include sales tax reimbursement computed to the nearest mill" during his or her promotional sales events in accordance with Regulation 1700(a)(2)(C). As an alternative, the retailer's signs may read "Sales tax is included in the selling price and will be paid by [retailer's name] in accordance with state and county law."

If the promotional sign and the sales invoice are in conflict with each other, the sales invoice will take precedence because it documents the actual transaction that occurred. For example, the price tag for an item is $108 and the sales tax rate is 8%. If the aforementioned sign is posted in the store and the sales invoice has only one charge of $108 or if the sales invoice itemizes charges of $100 in sales price and $8 in tax, the sales invoice and the promotional sign are consistent with each other. Both the sign and the sales invoice lead to the same result. If, however, the sales invoice states a sales price of $108 and tax reimbursement of $8.84 for a total charge of $116.84, the sales invoice and the promotional sign are in conflict with each other and the sales invoice will take precedence. 8/15/02; 12/19/02. (2003–3).