CLARIFICATION OF SALES TAX CHARGES REGARDING
TRADE-INS OR EXCHANGES
A customer who pays tax on everything bought from the parts supplier, buys an engine which required a Trade-in of the same type as delivered:
Is this the correct procedure, when old motor is turned in at time of transaction:
LESS TRADE-IN -75.00
Would exchanges of brake shoes, batteries, carburetors, starters, alternators, generators, tires or any other item be invoiced and taxable as in above?
NOTE: You can bill merchandise out at the Exchange price but they must include the tax on value of old cores.
Because the customer does not bring in old starter (or other exchange item) when the rebuilt one is delivered, parts supplier charges a deposit to insure its return. Should sales tax be charged and credited as described below?
ORIGINAL SALE: REBUILT STARTER $130.00
6% SALES TAX 10.80
In above transaction, customer later returned old starter (or other exchange item) and was credited:
STARTER DEPOSIT $50.00
SALES TAX 3.00
In above transaction is it permissible to refund or credit the tax on the deposit?
A parts supplier sells new parts which require a deposit be charged. Sales tax is charged on all items in the transaction--including tax on the deposit. The customer later returns the merchandise, un-used and in salable condition. Wholesaler refunds all the money paid him originally, including tax charged on the items requiring a deposit. Is this the correct procedure?