Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655
(d) DEFECTIVE MERCHANDISE
490.0800 Trade-In Involved. When an allowance is made for defective merchandise which is also accepted by the retailer as part payment on the purchase of other merchandise, the value of the merchandise traded in its defective condition must be included in taxable gross receipts. The retailer may claim a defective merchandise allowance, but must not include therein the trade-in allowance made for the merchandise. 11/12/64.