Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655
(a) RETURNED MERCHANDISE
(1) In General
490.0090 Returned Merchandise Deductions. A retailer sells paint to a customer who is a commercial painter. The paint delivered was incorrect which resulted in a loss of time on the job by the customer. The retailer issues a credit memo for the paint plus an amount to cover the customer's loss of time. Only the portion of the credit allocable to the return of the paint is deductible from gross receipts. The amount credited for the loss of time did not result in a bad debt, defective merchandise, or returned merchandise deduction. 6/21/72.