Under Spoilage Coverage – CP 04 40 (06-07) the insured has the benefit of Selling Price.
He suffers a spoilage loss and as part of documenting his loss, he scans the products that were spoiled and issues a receipt that includes the taxes that would have been charged had he sold the products.
Caption D. of the aforementioned form states the following:
D. Selling Price If Selling price is indicated by an "X" in the Schedule, the following is added to the Valuation Loss Condition: We will determine the value of finished "perishable stock" in the event of loss or damage at: 1. The selling price, as if no loss or damage had occurred; 2. Less discounts and expenses you otherwise would have had.
Can the taxes be deducted from the submitted claim?
Puerto Rico Subscriber
The taxes are not an income to the insured, but rather go straight from the sale to the appropriate tax allocation. As such, since the items were not yet sold, but perished before sale, the tax should not be included in the loss calculation. If the insured has to pay the taxes even if the items were not sold, this of course would change the answer.