A local news outlet recently contacted DOR with a question concerning the law governing refund of the sales tax on an item returned to a vendor or retailer.
The law is pretty straightforward: Retailers must refund the sales tax within 90 days of purchase of the item, as long as the consumer has the sales receipt or the retailer is able to verify the purchase from their store in Massachusetts.
After 90 days, the retailer may still return an amount equal to the sales tax, but the state is no longer required to in turn credit or refund the collected sales tax to the retailer, so if the retailer does return the sales tax in this instance, it is coming out of their own pocket.
As for refunding the purchase price, that is set by the retailer's policy. Some retailers will not refund the sales prices after 30 or 60 days or in the case of "final sales"; in that case the customer is generally not entitled to a refund of either the purchase price of the sales tax after that number of days.
Keep in mind the law says refunding the sales tax must be done within 90 days; but if the retailer sets a policy that all returns must be made within 30 days or 60 days, that time limit governs refund of the sales tax as well.
However, if a retailer's return policy permits a partial refund within 90 days as the result of deducting an "established handling fee," the customer is entitled to a full refund of sales tax paid. This issue was highlighted in a letter ruling issued by DOR on May 26 of this year.
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