How are the discount factors computed for the Retail Sales and Use Tax returns?
Effective beginning with the June, 2010 return due July 20, 2010, legislation enacted in the 2010 Session of the General Assembly suspended the dealer discount for dealers that are required to remit the Retail Sales and Use Tax by electronic funds transfer (“EFT”) and reduced the dealer discount for all other dealers. Those dealers that are not EFT mandatory are allowed a dealer’s discount of 1.6%, 1.2%, or 0.8% of the first three percent of the Retail Sales and Use Tax collected, depending on the dealer’s monthly taxable sales. To compute the dealer discount, the dealer would multiply the state Retail Sales and Use Tax due by seventy-five percent, because the discount is only allowed on the first three percent of the four percent state Retail Sales and Use Tax, and then multiply the result by either 1.6%, 1.2%, or 0.8%, depending on the dealer’s monthly taxable sales, to get the amount of the discount. To allow the dealer to calculate the dealer’s discount in one step, TAX has provide
Related Questions
- Why do the dealer’s discount factors on Form DM-1 seem so high in comparison with the factors on the Retail Sales and Use Tax return (Form ST-9)?
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