SUT-25 - Sales Tax Filing - Reporting Returned Merchandise - Amounts Less Than or Equal to Single Article Limitation

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

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

Note, if a retailer does not report the original sale of the item in Gross Sales on Line 1 of the current sales tax return because the item was returned in the same month, the retailer should not claim credit for the refunded tax.

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