Returned merchandise

Section 1. "Gross receipts" and "sales price" shall not include the amount charged for merchandise returned by customers if:

(1) The full sale price, including that portion designated as "sales tax" or "use tax" is refunded either in cash or credit; and

(2) The customer, in order to obtain the refund or credit, is not required to purchase other property at a price greater than the amount charged for the property that is returned.

Section 2. Refunding or crediting the customer with the purchase price, less rehandling and restocking costs, shall constitute a refund or credit of the entire amount.

Section 3. The records of the taxpayer shall clearly reflect and support the taxpayer's claim for all these deductions for merchandise returned for credit or refund.

Section 4. Articles of tangible personal property that are repossessed by the seller shall not be classified as returned goods.

Section 5. Credits or refunds allowed by sellers to consumers on account of defects in merchandise sold shall be excluded in the same manner as credits or refunds for returned merchandise.