ID H0891

Sellers who erroneously collect sales tax when use tax was actually owed may claim a credit against the use tax due on that transaction, with the credit not exceeding the use tax amount owed to the state

Once a seller has been notified that use tax was owed instead of sales tax, no additional credits are allowed for subsequent similar transactions

Buyers who paid sales tax when none was due may request a refund from the seller, and the seller must refund the amount paid

Sellers who refund erroneously collected sales tax to buyers may take a credit or seek a refund from the State Tax Commission equal to the sales tax refunded minus any use tax the seller owes

Effective date is July 1, 2026, with an emergency clause declaring immediate effect upon that date