H.W.
I agree with Rosebud-- I have a seven year old boy. There are times when he's just blowing off steam ("Why am I the only one...." "You always make me do chores..." etc); these I usually ignore, just encourage him to do what needs to be done.
We have recently also had a season of trying out that whole "talking back" rudeness, and honestly, our responses are varied. It really depends on how it fits into the larger picture of the situation.
1.If I feel Kiddo is only 'trying out' being sassy but in a relatively decent mood, I will ask him "oh, well, that sounded bossy. You want to try that again?"
2. "Take a break and come back when you are ready to speak politely so we can solve the problem". This, when he's frustrated and needing some space from a problem for a few minutes. We find this works for him.
3.There have been a few times when the rudeness was such that I had him go sit in the bathroom or some other place for a seven-minute time out. (Some other place being 'not his room'.) I find there is a difference between taking down time and needing an actual time out to 'please think of what you can do next time if you are feeling mad like this'-- and we'll make a list of positive choices. If the attitude and behavior go any further, there's loss of privileges (tv/media time) and/or an early bedtime.
I realize that it's hard for children to "know their place" (that they and their parents are not considered equals, which is a hard reality for them) while they are expressing themselves and their anger. They aren't good at it. Think about all of the adults you might know who are challenged by this. :)
I guess this isn't definitive, but it really depends on what events have led up to the back talking as to how I address it. A rude, snotty attitude one day at a restaurant lunch meant that my husband and I decided to take away the fun outing we had planned for that afternoon. He needed to know the griping was unacceptable and unpleasant and that he doesn't get a treat for ruining our lunch. That's been the most extreme so far.
We try really hard not to make every single thing he says a hill to die on, which is why I suggest offering "you want to try that again?" before jumping to the conclusion that there is deliberate, genuine rudeness going on. Kids are rough with each other, talk to each other in bossy ways, and other kids are going to try this out with their parents. I want to help my son maintain good relationships, so we do address this at home and he knows that I expect him to always be respectful with the other adults in his life. I also don't want to overreact, either.
Some people might find the varied responses inconsistent; I would suggest that when we are connected with our kids, guidance in the moment is meant to solve an overall problem. So, if he's frustrated and challenged by something and spouting off, I want to teach him to take a break and come back to the activity. But if it's just intentional snotty-faced mean rudeness, then we bring a bit of thunder to the consequence.