Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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460.0000 REIMBURSEMENT FOR SALES TAX—Regulation 1700

Annotation 460.0144

460.0144 Offsets—Excess Tax Reimbursement. In general, a taxpayer who is providing a service (not transferring property to customers) would not be entitled to a credit or an offset against its own use tax liability with respect to any excess tax reimbursement collected from customers because it would not be regarded as transferring property within the meaning of section 6901.5 and Regulation 1700(b)(4).

However, when the taxpayer collected the excess tax reimbursement as a result of the Sales and Use Tax Department erroneously taking the position that the transactions constituted sales and leases of tangible personal property, the offset should be allowed against the use tax liability incurred by taxpayer on the same transactions. The offset should only be allowed for the periods before the taxpayer was notified that it was providing a service rather than transferring tangible personal property. 3/14/95.