Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655
(a) RETURNED MERCHANDISE
(2) "Full Sale Price"
490.0300 Tax Reimbursement. An automobile is purchased with the requirement that it contain a certain type of transmission. Delivery is made of a vehicle containing a different type of transmission and the dealer agrees to and subsequently delivers a used automobile of the same year and model containing the transmission desired. Total sales price remains unchanged, the contract being altered only to reflect that it covered the second car.
The second transaction is taxable, but at the same time, retailer is entitled to a returned merchandise deduction which would offset the tax on the second transaction, provided he refunds or credits the purchaser for the amount of tax reimbursement charged on the first transaction. 4/19/54.