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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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490.0000 Returns, Defects and Replacements—Regulation 1655

Annotation 490.0095

(a) Returned Merchandise

(1) In General

490.0095 Settlement of Litigation. When a return of merchandise and a refund of money is made in settlement of litigation, the returned merchandise deduction is not applicable. The amounts returned to a purchaser pursuant to a settlement are in the nature of damages which do not differ in any realistic sense from any other damages paid by the seller as a result of wrongful actions in the conduct of the transaction. 5/3/90.