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Documenting your credit - examples

Taxpayers with large volumes of records may provide documentation in a table format (schedule or summary). You must provide enough information for the Department to be able to verify the correct jurisdiction and amount of credit.

  • invoice number
  • date of invoice
  • name of purchaser or supplier
  • item sold or purchased
  • amount of invoice (excluding tax)
  • amount of tax billed
  • taxing jurisdiction where sale or purchase was made
  • the reason you are entitled to a credit or refund

We may request documentation to verify any schedule or summary that you submit.

Examples for various credit types are presented below
Not all fields may be applicable to you, depending on the nature of the credits being claimed.  Use the fields that apply to you.
Example for multiple credit types:

 

Customer name

Invoice date(mm/dd/yy)

Jurisdiction where sale was reported

Amount charged to customer

Tax amount charged to customer

Total invoice amount

Transaction type*

Exemption certificate provided by customer?(yes/no)

Month/year when tax was originally remitted(mm/yy)

Bad debt: Tax year debt was written off(yyyy)

Explanation

Amount of tax credit claimed

*returned merchandise, refund to customer of tax remitted in a prior period, exemption certificate received, etc.

Retailer example:
A retailer paid sales tax on supplies that he intended to use as a supply in his business.  He later resold the items to customers instead of using them, and charged sales tax on the items.  The retailer may claim a credit for the tax he paid on his original purchase.  (This retailer does not keep track of customer names as part of his records.)

 

Date of sale
(mm/dd/yy)

Jurisdiction
where sale
was reported
Amount
charged to
customer
Tax amount
charged to
customer
Total
invoice
amount
Month/year when
tax was originally
paid (mm/yy)
Jurisdiction where
tax was originally
paid (if different)
Amount of
tax originally
paid
Explanation

Amount of
tax credit
claimed

 

Contractor example:
Contractors generally must pay sales tax to their suppliers when they buy materials and supplies, and they must collect sales tax on certain jobs they perform for their customers.  They may then claim credits for sales tax paid on certain materials they use in these jobs and apply the credits against the tax they owe.  In general, they can take sales tax credits when they:

  • paid sales tax on building materials to a supplier;
  • transferred those materials to their customers in a taxable repair, maintenance, or installation service; and
  • charged sales tax to their customers.

An example of documentation that a contractor would use to substantiate credits:

Customer name

Invoice date(mm/dd/yy)

Amount billed to customer for labor

Amount billed to customer for materials

Tax amount billed to customer

Total invoice amount

Transaction type*

Exemption certificate provided by customer?(yes/no)

Cost of materials used in repair and maintenance

Cost of materials used in capital improvements

Explanation

Amount of tax credit claimed

* Example: services such as repair/maintenance, or services for exempt organizations

Example for purchases of utilities eligible for exemption:
In certain situations, a vendor may pay tax on utilities and be entitled to claim a credit for the tax paid.  This includes utilities used directly and exclusively in manufacturing, or when a landlord sells utilities to tenants (submetered).

An example of a spreadsheet that would substantiate this type of credit:

Vendor name and address

Invoice date(mm/dd/yy)

Utility type*

Transaction type**

Total purchase amount

Exempt percentage

Amount eligible for exemption

Amount of tax credit claimed

* Natural gas, electricity, refrigeration, or steam

**used in manufacturing, submetered to tenants, or resold

Updated: