Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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R

490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655

Annotation 490.0228

(a) RETURNED MERCHANDISE

(2) "Full Sale Price"

490.0228 Returned Merchandise. Property was purchased from a retailer with tax reimbursement added to the price. It was subsequently returned to the manufacturer's service center because of unsatisfactory performance. Being unable to cure the defect to the customer's satisfaction, the manufacturer refunded the purchase price to the customer, but did not refund the amount of sales tax reimbursement. Under the Sales and Use Tax Laws, the manufacturer was not required to refund the sales tax reimbursement to the customer.

In addition, neither the manufacturer nor the retailer are entitled to a returned merchandise deduction because the deduction is only available to the retailer if the retailer refunds the entire sale price and sales tax reimbursement to the purchaser. 2/13/90.