contract-law tax-law new-mexico
Gross Receipt Service Returns
<p>For a purchase return in NewMexico is a company required  to return the gross receipt tax paid when the purchase was originally made? Assuming that the service agreement has no mention of a return policy. Any case law that has similar parameters would be helpful.</p>

<p>The amount that a company refunds when a purchase return is made is a matter of company policy. </p>

<p>It is customary to return the entire amount paid including the gross receipt tax paid, and in credit card transactions, a charge reversal that the customer can insist upon under the merchant agreement often has this effect. </p>

<p>This will have the effect of making the transaction a wash for both the seller and the buyer.</p>

<p>If the purchase return is made during the same reporting period as the purchase, generally only the purchase, net of the refund, counts towards gross receipts tax.</p>

<p>If the purchase return is made during a different reporting period than the purchase, the seller can claim the purchase refund as a deduction from their gross receipts for the future tax period.</p>

<p>Don't take my word for it. The exact rules for handling returns for tax purposes are set forth in the <a href="http://164.64.110.239/nmac/parts/title03/03.002.0227.htm" rel="nofollow noreferrer">relevant New Mexico administrative code regulation</a>.</p>
