Offsets to operating expenditures, such as returns by vendors of deposits, refunds and rebates, are not considered contributions. Note, however, that rebates to committees must be offered in the ordinary course of business and on the same terms and conditions as those offered to nonpolitical entities. Otherwise, the rebate may be considered a contribution—a prohibited contribution if a corporation pays the rebate.
Reporting offsets to operating expenditures
Refunds, rebates and returns of deposits are considered offsets to operating expenditures. For operating expenditures originally itemized on Schedule B, the offset should be itemized on Schedule A once the committee receives more than $200 in such offsets from the same source during a calendar year. Enter the total on Line 15. The itemized entry should indicate the nature of the transaction (refund, rebate, etc). Include the date and/or report of original disbursement.
Reporting offsets to operating expenditures originally allocated between federal and nonfederal accounts
Refunds and rebates received for expenses that were originally allocated between the party committee's federal and nonfederal account must be deposited in the federal or allocation account. The refund or rebate must then be allocated between the federal and nonfederal accounts according to the same ratio used to allocate the original disbursement and the federal account must transfer the nonfederal portion to the nonfederal account. This must be reported using one of two methods:
Method 1: Disclose the full refund/rebate as a negative entry allocated between the federal and nonfederal accounts on Schedule H4. The purpose field should specify the nature of the transaction (refund, rebate, etc) and include the date and/or report of original disbursement. Method 1, described in AO 1995-22, is no longer applicable to national party committees.
Method 2: Disclose the full refund/rebate on Schedule A, supporting Line 15. Disclose the federal account’s transfer to the non-federal account for the nonfederal share of the refund/rebate on Schedule H4. The transfer on H4 should be 100 percent federal and should not be allocated. The purpose/additional text field should specify the nature of the transaction (refund, rebate, etc) and it is also recommended to include the date and/or report of original disbursement.