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For a purchase return in NewMexico is a company required to return the gross receipt tax paid when the purchase was originally made?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.

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The amount that a company refunds when a purchase return is made is a matter of company policy.

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.

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

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.

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.

Don't take my word for it. The exact rules for handling returns for tax purposes are set forth in the relevant New Mexico administrative code regulation.

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