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)?
The discount is actually higher on the Form ST-9 because the state Retail Sales and Use Tax dealer discount is on the first three percent of the four percent tax, or 75%, whereas the Digital Media Fee dealer discount is on the first three percent of a ten percent fee, or 30%. Therefore, the dealer’s discount on the Retail Sales and Use Tax is taken on a bigger percentage of the tax.
