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 460.0145

460.0145 Offsets—Excess Tax Reimbursement. An advertising agency billed a client for finished artwork and for a construction contract to install signs on the same invoice. The agency charged sales tax reimbursement on the construction contract, but failed to do so on the sale of the finished artwork. Although the two errors regarding the sales tax reimbursement were made on the same invoice, this does not mean they are part of the same transaction. Regulation 1700(b)(4) states that tax reimbursement collected on a specific transaction can only be used to satisfy a tax liability arising from the same transaction. The same transaction means all activities involved in the acquisition and disposition of the "same property." Signs and finished artwork are not the same property. Therefore, the excess tax reimbursement collected in one transaction cannot be offset against the noncollection of tax in another, even if billed on the same invoice. 9/15/93.