Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2017

Sales and Use Tax Annotations

A    B    C    D    E    F    G    H    I    J    L    M    N    O    P    R    S    T    U    V    W    X   



Annotation 555.0021

555.0021 Discount. An oil company sells tires, batteries and accessories (TBA) to its dealers and also sells service station equipment. The dealers receive "credits" for purchases of TBA that can be applied only to purchases of equipment. The dealer must pay at least 70 percent of the regular price of the equipment from his own funds. The credit is a wholly contingent right. It is contingent upon the subsequent purchase by the dealer of equipment and payment of 70 percent of the normal price for the equipment. The oil company incurs no expense by issuing the contingent credit.

The allowance of these "credits" is viewed as a discount on the charge made for the equipment. The amount of tax due on the sales of the equipment is based on the charge for the equipment less the "credits" allowed. 1/30/73.