(A) If a retailer collects from the purchaser a state or local sales tax in an amount that exceeds the amount authorized pursuant to § 12-36-940, or the amount required to be collected pursuant to § 12-36-1350, the retailer may be held liable for a penalty equal to one hundred fifty percent of the amount of tax collected that exceeds the amount authorized to be collected from the purchaser pursuant to § 12-36-940 or required to be collected from the purchaser pursuant to § 12-36-1350. The assessment or remittance of this penalty does not relieve the retailer of an obligation the retailer has to repay the purchaser tax collected that exceeds the amount authorized or required to be collected from the purchaser pursuant to Chapter 36 of this title.

(B) Notwithstanding the provisions of subsection (A), a retailer is not subject to this penalty if the retailer:

(1) made a good faith effort to determine the proper tax rate;

(2) made a good faith effort to determine whether or not an exemption or exclusion was applicable; or

(3) refunds to the purchaser the amount that exceeded the amount authorized or required to be collected on a particular sale within ninety days of being notified and receiving documentation of the proper tax rate or the applicability of the exemption or exclusion.

(C) The department, at its discretion, may extend the time for issuing a refund pursuant to subsection (B)(3) to avoid the penalty if the retailer makes a request in writing to the department.

(D) The imposition of the penalty must be based on the facts and circumstances and is at the sole discretion of the department.