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Rebate has two legal definitions:

(1) A partial return of payment already made. In a commercial context, where rebates serve as a discount to the purchase price, the FTC Consumer Information page describes rebates as usually “require[ing] consumers to pay the full cost of an item at the time purchase, then to send documentation to the manufacturer or retailer to receive a rebate by mail.” In a tax context, rebates, also referred to as refunds, are a return of a taxpayer’s excess taxes when they paid more than they owed. For example, the Internal Revenue Code § 6428, as part of the CARES Act, allowed for an advance tax rebate to serve as a stimulus payment.

(2) A government subsidy to assist with rent payments. Also referred to as rent rebate.

[Last updated in December of 2020 by the Wex Definitions Team]