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
490.0095 Settlement of Litigation. When a return of merchandise and a refund of money is made in settlement of litigation, the returned merchandise deduction is not applicable. The amounts returned to a purchaser pursuant to a settlement are in the nature of damages which do not differ in any realistic sense from any other damages paid by the seller as a result of wrongful actions in the conduct of the transaction. 5/3/90.