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QUESTION DETAIL
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We offer our clients that purchase on credit, a discount if they pay within 10 days. It is our understanding that Massachusetts Department of Revenue treats the amount with the discount as subject to sales tax? However, what happens if our client doesn't pay within the 10 days?
ANSWER
The BIDaWIZ Team's Answer:
This is a very good question. Please note that generally any discount for early payment offered to customers who purchase tangible personal property on credit is included in the sales price. In addition, the sales price subject to tax includes the discount, whether or not payment is made within ten days.
References: Massachusetts Sales Tax 830 CMR 64H.1.4
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