Cash discounts

From the 2024 DOR Tax Exemption Study

Home Education Industry Guides Auto Dealers Discounts/rebates Print Discounts/rebates What is a discount? A discount is an amount or percentage taken off of the actual selling price. The balance is the amount on which the retail sales tax is charged. How should a discount be reported on the excise tax return? When the dealer gives a true discount (not reimbursed by the manufacturer or anyone else), the amount the retail customer is actually charged is subject to the retail sales tax and the Retailing business and occupation tax. If the sale is a wholesale sale, the amount the customer is charged is subject to the Wholesaling B&O tax classification. The amount of the sale, before the discount is subtracted, should be reported in the gross amount column of the excise tax return. When the discount is given, the amount of the discount may be deducted in the deduction column. Discounts on retail sales are deductible under both the Retailing B&O and Retail Sales classification, when the discount is subtracted before retail sales tax is added. Discounts on wholesale sales may be deducted under the Wholesaling B&O tax classification. Early pay discount Dealers often will reduce a bill for