Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
(a) IN GENERAL—DEFINITION
495.0220 Embezzled Merchandise. When a retailer's employee embezzles merchandise and the retailer has the option to recover the merchandise or accept cash payment from the embezzler and the retailer elects to accept the cash, the transfer is a taxable sale. If it is impossible for the retailer to recover the merchandise, the payment by the embezzler constitutes damages for conversion and not taxable gross receipts. 9/14/67.