Sales Tax Deductions
The Deductions schedule on the Retail Sales Tax Return allows the following deductions from sales tax. Deductions taken on the "Other" line must include an explanation.
- Service sales (sales that were exclusively for services, not tangible personal product)
- Sales to governmental agencies, religious or charitable organizations (these sales should be documented and records kept)
- Sales of gasoline
- Sales of drugs by prescription and prosthetic devices
- Trade-ins for taxable resale
- Bad debts charged-off, returned goods, trade discounts and allowances where tax as paid (cash discounts are not allowed)
- Cost of utilities, excluding tax (restaurants only)
- Sales of agricultural compounds and pesticides
When you file through the Revenue Online service, you will be prompted to provide the deductions information and it will become part of the e-filed return.
If the return is filed on paper, the total from the Deductions schedule must be reported on the sales tax return and the Deductions schedule must also be submitted with the sales tax return.