Refund Sales Tax on Returned Items
- Sales Tax News
- Dec 29, 2016 | Gail Cole
For retailers, the holiday frenzy doesn’t necessarily end once the holiday has passed. Ensuing days are often filled with returns and exchanges. Connecticut retailers are reminded to refund sales tax along with the purchase price when products are returned within 90 days of the date of purchase.
According to Connecticut State Representative Jeffrey J. Berger (D), “I have had several complaints from constituents that major retailers have refused to refund sales taxes on items returned within the time allowed by law.” Under Connecticut law, sales tax should be refunded on products returned with a receipt within 90 days.
“Sales tax paid on the original sale may only be credited or refunded if the customer produces the original receipt or other verification of the date and place of purchase substantiating that the original sale was within 90 days of the date of the return and that Connecticut sales tax was paid in accordance with Conn. Gen. Stat. § 12-407(a)(8)(B)(ii) and §12-407(a)(9)(B)(ii).”
In the event products are exchanged for dissimilar merchandise or returned because of a defect, no additional sales tax is due. An example of a "similar exchange" is when you turn in a large sweater for a medium size; a "dissimilar exchange" is when you turn in a sweater for an Xbox. As explained by the department:
“When a retailer exchanges or replaces taxable merchandise with identical or similar merchandise for no additional consideration because of a defect or because the item is otherwise unsatisfactory to the customer, no additional sales tax is due from the customer regardless of whether the customer is unable to produce the original sales receipt or other verification of the date and place of purchase, and/or the exchange or replacement takes place more than 90 days after the original retail sale.”
The Department of Revenue Services encourages retailers to maintain accurate records of uneven exchanges, for audit purposes.
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