Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 490.0128


(2) "Full Sale Price"

490.0128 Cost of Trip Not Refunded. A retailer is engaged in the business of locating new and used machinery for sales to prospective customers. Six machines were located in a distant city. The retailer and the prospective customer journeyed to the distant city to inspect the machines. The prospective customer purchased the six machines with the understanding that they could be returned. The machines were returned and the purchaser was credited for the return less freight and handling and the cost of the trip to the distant city.

In this situation, a deduction for returned merchandise is not allowable since the full sales price as set forth in Regulation 1655(a) was not refunded to the purchaser. Refund or credit of the entire amount is deemed to be given when the purchase price, less rehandling and restocking cost, is refunded to the customer. The cost of the retailer's journey to the distant city is not a rehandling and restocking cost. 9/17/71.