If I purchase 3 items from a company and 1 of them comes with a 100% rebate, should the rebate check include the sales tax paid on the rebated item? If not, do I somehow claim the sales tax on my tax return or am I obligated to pay the sales tax even though the final price of the item was $0?

I believe it would depend upon the sales tax rules and regulations of the state where you live. Typically, if you apply a manufacturer’s rebate to reduce the sales price at the time of the sale, the rebate is most likely treated like a cash discount and is therefore excluded from the sales price that would have been subject to taxation. If you apply for and receive a rebate after the sale, the sales tax is based on the full purchase price of the property and therefore you are not entitled to a refund of taxes paid on the amount of the rebate.

Most times there is a disclaimer that customer pays all taxes. The rebate is usually between you and the manufacturer and not the retailer. Sometimes a few cents in tax is worth a free item. Also I would assume it would vary from state to state. What irks me more is paying sales tax on used items. Every time something like a car is sold the govt gets a cut. That is double (or more) dipping in my opinion.

Since the Tax is imposed on the original transaction, not subsequent adjustments, I would think the original Sales Tax would be applicable. It would still show on the Supplier side as a sale, meaning the Supplier would then have to pay the Taxes. If you are able to Deduct Sales Taxes as an adjustment to Income in your State/Province, that would be your only recourse. Are you also claiming the Rebate as Income on your Taxes? Just hope the Govenment doesn't see it that way. There is nothing to learn from someone who already agrees with you.

In Michigan things work like Dumbob described. In addition we have what is called use tax, which is levied at the same rate as sales tax. The difference is even if an item subject to use tax is returned, the use tax is not refunded like sales tax would be. An example is a core charge for rebuildable auto parts. You buy a rebuilt alternator, for example and pay a refundable core deposit. When you return the usable core to the parts store you will not get a refund on the use tax paid.