Sales Tax Holiday FAQ's

How should retailers handle exchanges and returns?

  • If a consumer buys an eligible item during the sales tax holiday and later exchanges it for the same item in a different size or color, the retailer should not charge sales tax even if the exchange is made after the end of the sales tax holiday.
  • If a consumer buys an eligible item during the sales tax holiday and returns the item after the tax holiday period for credit on the purchase of a different item, the retailer must charge sales tax on the sale of the newly purchased item, even if it would have been eligible for the exemption during the sales tax holiday.
  • If a consumer buys an eligible item before the holiday period, but returns the item during the sales tax holiday period and receives credit on the purchase of a different item of eligible property, no sales tax is due on the sale of the new item.  The retailer must provide the consumer credit for both the purchase price and sales tax paid on the item being returned.

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