- Many shoppers go online to find gifts, leading to a high rate of returns and questions about sales tax refunds
- Sales tax is generally refunded when an item is returned, but details are important
- In 2022, retail returns in the U.S. totaled $817 billion, with a significant portion from online purchases
- Online purchases have a higher return rate compared to in-store, with eCommerce returns increasing and in-store returns decreasing from 2022 to 2023
- Clothing is the most returned item, while computers are the least returned
- Major online retailers often have extended return periods, especially for holiday-season purchases
- Sales tax refund calculations depend on factors like the amount of tax charged, sale location, timing of the return, and whether extra charges were involved
- Most states allow retailers to deduct sales tax refunds from taxable sales, but some have time limits for this process
- Restocking fees charged by retailers for returns are usually not subject to sales tax as they are considered a service
- Handling sales tax refunds involves precise calculations and may require amending tax returns if already filed
Source: taxconnex.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
