Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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R

490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655

Annotation 490.0760

(d) DEFECTIVE MERCHANDISE

490.0760 Drilling Bits. A retailer who sold a carbide-tipped bit which proved defective upon initial use, sold the customer a new bit, and subsequently refunded the entire selling price of the original bit, including sales tax reimbursement, was entitled to take a deduction for defective merchandise. Where the retailer sold a bit which the customer damaged after substantial use and subsequently sold the customer a new bit, giving credit for the selling price of the original bit, less a charge for use thereof, the retailer was not authorized to take a deduction for defective merchandise under Regulation 1655 nor for returned merchandise under Regulation 1655. 12/17/64.