Idaho Admin. Code r. 35.01.02.045 - RESCINDED SALE, REFUNDS OF PURCHASE PRICE
Sections 28-2-608, 63-3612, 63-3613, Idaho Code
01.
A Rescinded Sale. A
transaction in which the seller and buyer place each other in the same
positions they were in prior to entering into any taxable transaction; and a
transaction which meets the rules of the Uniform Commercial Code for revoking
acceptance in whole or in part. See Section
28-2-608, Idaho Code.
(3-31-22)
02.
Refund of
Remitted Sales Tax. Where a seller has collected and remitted tax on the
sale and has refunded it to the buyer on rescission, the Commission will refund
or credit the seller accordingly. The burden of proving a rescission is on the
person claiming the refund or credit on a rescinded sale. See Rule
117 of these rules.
(3-31-22)
03.
Amount Refunded
Reduced. If the seller reduces the amount refunded to the buyer on
returned merchandise to recover depreciation, buyer usage or other costs, the
amount of the reduction is considered a charge by the seller to the buyer for
use of the tangible personal property and is taxable in the same manner as a
rental. The amount of sales tax refunded to the buyer must be reduced
accordingly. (3-31-22)
04.
Restocking Charge. If a seller places a restocking charge on
returned merchandise, the charge is not taxable. A restocking charge is a fee
charged by a seller to cover his time and expense in returning goods to resale
inventory when the buyer has not used the goods in a way that decreases their
value. (3-31-22)
05.
Required
to Buy Other Property. If the customer, in order to retain the refund,
is required to buy other property at a higher price, there is no refund and the
amount credited on the subsequent purchase is treated as a trade-in. The seller
must charge the customer sales tax on the difference between the amount
credited and the sales price of the other property. (3-31-22)
06.
Documentation. In order to
obtain refund credit, the seller must keep adequate documents to support his
claim for refund or adjustment. (3-31-22)
Notes
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