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 490.0513.075

(c) WARRANTIES

(1) In General

490.0513.075 "Lemon Law"—Taxability of Mileage Charge. Under the "Lemon Law" the manufacturer must pay an amount equal to the actual price paid or payable by the buyer, including any sales tax and any incidental damages to which the buyer is entitled. The manufacturer may deduct for usage of the defective vehicle and the amount must be deducted from the original vehicle selling price before calculating the sales tax refund. In other words, the "charge attributable to use" is subject to tax. Any refund or credit for sales tax previously paid is limited to the net amount of the credit or refund after the "charge attributable to use." 7/12/93.