How is an exchange of merchandise handled?

If a customer buys an eligible item during the sales tax holiday and later exchanges it for the same item in a different size or color, tax is not to be charged even if the exchange is made after the sales tax holiday.

If a customer buys an eligible item during the sales tax holiday and returns the item after the tax holiday period for credit on the purchase of a different item, sales tax applies to the sale of the newly purchased item, even if it would have been eligible for the exemption during the sales tax holiday.

If a customer buys an eligible item before the holiday period, but returns the item during the sales tax holiday period and receives credit on the purchase of a different item of eligible property, no sales tax is due on the sale of the new item.

If your question has not been answered, please visit the Contact Us site and email us your question. Great questions from taxpayers is how this section of the website is created.