Sales Tax Refund & Retroactive Exemption Policy

Purpose

Daniel House Club ("DHC") is required to collect sales tax on taxable transactions unless valid documentation supporting a tax exemption is received and accepted in accordance with applicable state and local law.

This policy establishes DHC's requirements for sales tax refunds and for resale or other exemption documentation received after an order has been placed.

Customer Responsibility

Customers claiming a resale or other sales tax exemption are responsible for providing DHC with complete and valid documentation at or before purchase whenever possible and, in all cases, prior to fulfillment of items from the vendor’s warehouse.

Customers should not assume that providing documentation after an order has been fulfilled will result in a refund.

Once approved, exemption documentation may be applied to qualifying future purchases for as long as the documentation remains valid and applicable.

General Policy

Customers claiming a sales tax exemption should provide DHC with complete and valid exemption documentation at or before the time of purchase.

Once approved, valid exemption documentation will be applied to qualifying purchases in accordance with applicable state law.

Providing a resale certificate, exemption certificate, permit, or other documentation after a purchase does not automatically entitle the customer to a refund of previously charged sales tax.

Previously Fulfilled Items

As a general policy, DHC does not retroactively apply resale or exemption certificates to items that have already been fulfilled.

Once an item has been fulfilled, sales tax will generally not be refunded solely because the customer subsequently provides resale or other exemption documentation, even if that documentation may be valid for future purchases.

Customers are responsible for providing exemption documentation in a timely manner so that it can be reviewed and approved before fulfillment.

This policy helps ensure that DHC does not refund sales tax to a customer while remaining liable for that same tax to a state or local taxing authority.

Requests Received Before Fulfillment

If a customer provides valid exemption documentation after placing an order but before the applicable item has been fulfilled, DHC will review the documentation and, provided the exemption is valid, will refund the sales tax on unfulfilled items.

Merchandise Returns

This policy does not prevent the refund of sales tax associated with a qualifying return of merchandise.

When merchandise is returned in accordance with DHC's return policy and the customer receives a refund of the taxable purchase price, the applicable sales tax associated with the refunded merchandise will be refunded as part of the return transaction.

Canceled and Unfulfilled Orders

If an order or item is canceled before fulfillment, applicable sales tax will be reversed as part of the cancellation.

Sales tax adjustments on partially fulfilled orders are determined on an item-by-item basis. The fact that one or more items on an order remain unfulfilled does not make previously fulfilled items on that same order eligible for a retroactive sales tax refund.

For example, if an order contains five items and three have already been fulfilled when DHC receives a valid resale certificate, Accounting may review whether the certificate can be applied to the two unfulfilled items. The certificate does not automatically qualify the three previously fulfilled items for a sales tax refund.

If DHC did not have a valid resale or exemption certificate applicable to the previously fulfilled items, those items remain subject to DHC's policy for previously fulfilled transactions, even though other items on the same order remain open or unfulfilled.

Similarly, the cancellation or refund of an unfulfilled item does not create eligibility for a sales tax refund on other items from the same order that have already been fulfilled.

The key determination is the fulfillment status of each individual item, not simply whether the overall order remains open.

Sales Tax Charged in Error

The restrictions on retroactive exemption certificates are not intended to prevent DHC from correcting sales tax that DHC determines was collected in error.

Accounting may approve an adjustment when:

  • DHC had valid exemption documentation on file when the transaction occurred but tax was charged because of a system or administrative error;

  • DHC incorrectly determined that a transaction or charge was taxable;

  • An order was sourced to an incorrect taxing jurisdiction;

  • A qualifying merchandise return or cancellation requires an associated sales tax adjustment; or

  • Applicable law otherwise requires DHC to correct or refund the tax.

These situations are different from a customer providing required exemption documentation after the items have been fulfilled and sales tax has been remitted to the state tax authority.

Accounting Review

Accounting has final authority to approve sales tax adjustments and refunds involving exemption documentation.

Sales, Customer Service, and other DHC personnel should not promise or guarantee a sales tax refund on a previously placed or fulfilled order and if this is done mistakenly, it does not supersede this policy or Accounting’s final determination.

Accounting may consider:

  • The applicable state and local jurisdiction;

  • The purchase and fulfillment dates;

  • When DHC received the exemption documentation;

  • Whether the transaction is in the current or a previously reported period;

  • Whether the documentation is valid and applicable;

  • Whether DHC has already reported or remitted the tax;

  • Whether applicable law permits the adjustment; and

  • Whether DHC can appropriately recover, credit, or otherwise adjust the corresponding tax liability.

Policy Summary

Customers should provide valid resale or exemption documentation at or before purchase or before fulfillment.

DHC does not retroactively apply exemption certificates or refund sales tax on previously fulfilled items solely because exemption documentation is subsequently provided.

Requests involving unfulfilled transactions will be reviewed by Accounting and, provided the resale certificate is valid, will qualify for a refund.

Sales tax associated with a qualifying merchandise return or cancellation may be refunded with the underlying transaction.

Sales tax adjustments on partially fulfilled orders are determined item by item. An unfulfilled or canceled item does not make previously fulfilled items on the same order eligible for a retroactive refund.

DHC may also correct sales tax collected in error or make adjustments when required by applicable law.