Laws, Regulations and Annotations

Search

BTLG Table of Contents > Sales and Use Tax Annotations > R > 490.0000 Returns, Defects and Replacements > Annotation 490.0820

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   

---

R

---

490.0000 Returns, Defects and Replacements—Regulation 1655

Annotation 490.0820

(d) Defective Merchandise

---

490.0820 Trade-In Allowance. A battery with a 24-month guarantee is purchased for $20 plus 60¢ tax. The battery fails at the end of 12 months. The customer returns the defective battery, worth $1 as junk, and is given a defective merchandise allowance of $10. A new battery is sold to the customer for $10 plus 30H tax. In computing gross receipts the retailer should regard the $1 junk value of the defective battery as a trade-in allowance and the remaining $9 as a defective merchandise allowance. In the alternative, the defective merchandise allowance could be regarded as $10 provided the trade-in value of $1 is added to the taxable gross receipts from the second sale. 6/25/58.