Idaho Administrative Code
Title IDAPA 35 - Tax Commission, State
Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES
Section 35.01.02.045 - RESCINDED SALE, REFUNDS OF PURCHASE PRICE
Current through September 2, 2024
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 A Rescinded Sale.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.
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 The burden of proving a rescission is on the person claiming the refund or credit on a rescinded sale.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.
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.
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.
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.
06. Documentation. In order to obtain refund credit, the seller must keep adequate documents to support his claim for refund or adjustment.
Effective March 31, 2022
