How is returned merchandise that has a price equal to or less than $1,600 reported on the sales tax return to claim credit for the refunded sales tax?

If an item that was included in Gross Sales on Line 1 on a previous or current tax return is returned, and the retailer refunds the purchaser the full price plus sales tax collected, then adjustments on the sales tax return are required to claim credit for the refunded tax. 

To illustrate, a chair that sold in April for $1,500 was returned in May.  The retailer will report in May $1,500 on Schedule A, Line 5 Returned Merchandise to receive a credit for state and local tax refunded to the purchaser. 

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