![]() ![]() The sales price subject to tax is $16.00. Situations in which this presumption may be rebutted include, but are not limited to, clearance sales, end-of-season sales, fire sales, going-out-of-business sales, and situations where the sales price paid by the retail customer is reduced by manufacturer's coupons or rebates to 50 per cent or less of the vendor's cost.Įxample 1: At the time of sale, Retailer A offers senior citizens a 20 per cent discount on calculators usually priced at $20.00. An item sold by a vendor at 50 per cent or less of the vendor's cost will be presumed to be a promotional item sold at substantially below cost. The vendor may claim a credit for any tax collected from the retail customer. ![]() In this situation, the vendor must pay a sales or use tax based upon the amount the vendor paid for the item. Generally, where property is transferred from a vendor to a customer for no additional consideration, or for a nominal consideration, or for an amount substantially below cost, the property constitutes a promotional item for sales tax purposes, and the vendor is considered its consumer. Trade discounts allowed and taken at the time of sale on sales to certain customers of a business are excluded from the sales price of tangible personal property upon which the sales tax is based. Any discount for early payment offered to customers who purchase tangible personal property on credit is included in the sales price. Cash discounts which are given to customers after the time of sale are not excluded from the sales price. Cash discounts allowed and taken at the time of sale are excluded from the sales price of tangible personal property upon which the sales tax is based.
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