Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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R

490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655

Annotation 490.0080

(a) RETURNED MERCHANDISE

(1) In General

490.0080 Rescission vs. Second Sale. A rescission, not a second taxable sale, occurred when the buyer of a business defaulted on his fourth installment payment and the buyer and seller agreed that the business be returned to the seller. The retention of the first three installment payments by the seller does not defeat the rescission since such payments can be considered payment for the use of and profits from the business during the period the buyer was in possession. However, the original sale is taxable and no returned merchandise deduction is allowable because the full purchase price was not refunded. 9/4/64.