When your business issues refunds in the form of store credit, it’s important to understand how those transactions are handled for sales tax purposes within the Kintsugi platform.
Key Takeaway
Even if a refund is issued as store credit, sales tax is treated as a standard negative transaction in Kintsugi. This means sales tax originally remitted is credited back in the period when the refund occurs—regardless of how the customer receives the refund.
How Sales Tax Works with Refunds in General
Let’s say you have a sale for $100 in March, and you charge $10 in sales tax. Kintsugi will include that $10 in your March sales tax filings.
If the order is later refunded in May, whether via cash, credit card, or store credit, Kintsugi logs a negative $10 sales tax in May.
This negative amount:
Reduces the total sales tax owed in the filing period.
If it can’t be fully utilized in the current period (e.g., if you owe less than the credit), the balance carries forward to future filings.
Platform Behavior: Stripe + Store Credits
If your store uses Stripe (alongside QuickBooks or custom API integrations) and issues store credit refunds, here's what happens:
The store credit itself is managed by Stripe or your eCommerce system—not Kintsugi.
However, Kintsugi still sees the refund transaction as a tax event.
The platform automatically records the negative transaction and associated sales tax as part of your filings.
This applies regardless of the refund method (store credit, cash, or otherwise), as long as the refund is processed and reported through your connected systems.
Who Should I Contact for Help?
For detailed integration-specific questions (e.g., how Stripe handles store credits internally), it’s best to consult:
Your eCommerce platform’s documentation
Your Stripe account settings or support team
If you're unsure whether your refund is being recorded properly in Kintsugi, our Support Team can help verify the data and tax impact.
Summary
Action | How Kintsugi Handles It |
Refund via store credit | Treated as a negative transaction for sales tax purposes |
Tax originally remitted | Credited back in the refund period |
Excess credit | Carried forward to future tax filings |
Integration responsibility | Handled by Stripe / connected platforms |
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