Post Content

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.

Written By:

Recent Posts

How does the CARES Act impact Massachusetts state tax? posted on Jul 14

The CARES Act was signed into law on March 27, 2020 to provide relief for individuals and businesses negatively impacted by the coronavirus outbreak. The Act includes provisions for both individuals and businesses. We’re going to help you understand the Massachusetts tax implications of the   …Continue Reading How does the CARES Act impact Massachusetts state tax?

Press Play: Billing to Resume posted on Jun 4

To give you as much time as possible to catch up on your expenses, DOR temporarily suspended some billing and various collection actions as a result of the COVID-19 health emergency. You can always see the balance due in your account and make partial or   …Continue Reading Press Play: Billing to Resume

What you should know about taxes if you are buying or selling masks posted on May 13

As you know, Governor Baker signed an order on May 1 that took effect on May 6 requiring Massachusetts residents to wear face masks in public when they cannot properly socially distance. Many Massachusetts-based companies have been stepping up to meet the demand for non-medical   …Continue Reading What you should know about taxes if you are buying or selling masks