Senate Bill sb0982c1

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    Florida Senate - 2007                            CS for SB 982

    By the Committee on Commerce; and Senator Haridopolos





    577-2037-07

  1                      A bill to be entitled

  2         An act relating to sales and use tax credits or

  3         refunds; amending s. 212.17, F.S.; authorizing

  4         dealers to take certain credits or obtain

  5         refund of taxes paid for worthless private

  6         label credit card accounts; specifying

  7         conditions; providing for remittances of taxes

  8         collected on such accounts; providing

  9         definitions; requiring dealers and lenders to

10         file a joint election to receive the credit or

11         refund; providing recordkeeping requirements;

12         authorizing the Department of Revenue to adopt

13         rules; specifying nonapplication to certain

14         claims for credits or refunds; providing an

15         effective date.

16  

17  Be It Enacted by the Legislature of the State of Florida:

18  

19         Section 1.  Section 212.17, Florida Statutes, is

20  amended to read:

21         212.17  Credits for returned goods, rentals, or

22  admissions; goods acquired for dealer's own use and

23  subsequently resold; worthless private label credit card

24  accounts; additional powers of department.--

25         (1)(a)  In the event purchases are returned to a dealer

26  by the purchaser or consumer after the tax imposed by this

27  chapter has been collected from or charged to the account of

28  the consumer or user, the dealer shall be entitled to

29  reimbursement of the amount of tax collected or charged by the

30  dealer, in the manner prescribed by the department.

31  

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    Florida Senate - 2007                            CS for SB 982
    577-2037-07




 1         (b)  A registered dealer that purchases property for

 2  the dealer's own use, pays tax on acquisition, and sells the

 3  property subsequent to acquisition without ever having used

 4  the property is entitled to reimbursement, in the manner

 5  prescribed by the department, of the amount of tax paid on the

 6  property's acquisition.

 7         (c)  If the tax has not been remitted by a dealer to

 8  the department, the dealer may deduct the same in submitting

 9  his or her return upon receipt of a signed statement of the

10  dealer as to the gross amount of such refunds during the

11  period covered by said signed statement, which period shall

12  not be longer than 90 days.  The department shall issue to the

13  dealer an official credit memorandum equal to the net amount

14  remitted by the dealer for such tax collected or paid.  Such

15  memorandum shall be accepted by the department at full face

16  value from the dealer to whom it is issued, in the remittance

17  for subsequent taxes accrued under the provisions of this

18  chapter. If a dealer has retired from business and has filed a

19  final return, a refund of tax may be made if it can be

20  established to the satisfaction of the department that the tax

21  was not due.

22         (2)  A dealer who has paid the tax imposed by this

23  chapter on tangible personal property sold under a retained

24  title, conditional sale, or similar contract, or under a

25  contract wherein the dealer retains a security interest in the

26  property pursuant to chapter 679, may take credit or obtain a

27  refund for the tax paid by the dealer on the unpaid balance

28  due him or her when he or she repossesses (with or without

29  judicial process) the property within 12 months following the

30  month in which the property was repossessed. When such

31  

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    Florida Senate - 2007                            CS for SB 982
    577-2037-07




 1  repossessed property is resold, the sale is subject in all

 2  respects to the tax imposed by this chapter.

 3         (3)  A dealer who has paid the tax imposed by this

 4  chapter on tangible personal property or services may take a

 5  credit or obtain a refund for any tax paid by the dealer on

 6  the unpaid balance due on worthless accounts within 12 months

 7  following the month in which the bad debt has been charged off

 8  for federal income tax purposes.  If any accounts so charged

 9  off for which a credit or refund has been obtained are

10  thereafter in whole or in part paid to the dealer, the amount

11  so paid shall be included in the first return filed after such

12  collection and the tax paid accordingly.

13         (4)(a)  The department shall design, prepare, print and

14  furnish to all dealers, except dealers filing through

15  electronic data interchange, or make available or prescribe to

16  the dealers, all necessary forms for filing returns and

17  instructions to ensure a full collection from dealers and an

18  accounting for the taxes due, but failure of any dealer to

19  secure such forms does not relieve the dealer from the payment

20  of the tax at the time and in the manner provided.

21         (b)  The department shall prescribe the format and

22  instructions necessary for filing returns in a manner that is

23  initiated through an electronic data interchange to ensure a

24  full collection from dealers and an accounting for the taxes

25  due. The failure of any dealer to use such format does not

26  relieve the dealer from the payment of the tax at the time and

27  in the manner provided.

28         (5)  The department and its assistants are hereby

29  authorized and empowered to administer the oath for the

30  purpose of enforcing and administering the provisions of this

31  chapter.

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    Florida Senate - 2007                            CS for SB 982
    577-2037-07




 1         (6)  The department has authority to adopt rules

 2  pursuant to ss. 120.536(1) and 120.54 to enforce the

 3  provisions of this chapter.

 4         (7)  The department, where admissions, license fees, or

 5  rental payments or payments for services are made and

 6  thereafter returned to the payors after the taxes thereon have

 7  been paid, shall return or credit the taxpayer for taxes so

 8  paid on the moneys returned in the same manner as is provided

 9  for returns or credits of taxes where purchases or tangible

10  personal property are returnable to a dealer.

11         (8)(a)  In the case of private label credit card

12  accounts found to be worthless and deductible as bad debts for

13  federal income tax purposes, a dealer or lender may take a

14  credit or obtain a refund of the taxes previously paid by the

15  dealer under this chapter on the unpaid balance due on the

16  worthless accounts if a proper election is made under

17  paragraph (e) by the dealer and lender and the following

18  conditions are met:

19         1.  No credit or refund was previously claimed or

20  allowed on any portion of the account.

21         2.  The accounts have been found worthless and are

22  deductible as bad debts for federal income tax purposes by the

23  lender or any entity affiliated with the lender under 26

24  U.S.C. s. 1504.

25         3.  The accounts are found to be worthless on or after

26  July 1, 2007, and the credit or refund is claimed not later

27  than 12 months following the date on which the accounts are

28  charged off for federal income tax purposes.

29         (b)  If a dealer or lender thereafter collects in whole

30  or in part any account for which a credit or refund has been

31  obtained under this subsection, the dealer or the lender shall

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    Florida Senate - 2007                            CS for SB 982
    577-2037-07




 1  include the amount collected and account for tax on that

 2  amount in the earlier of the dealer's or lender's first return

 3  or refund claim filed after the collection or a statement

 4  filed with the department by the 20th day of the month

 5  following the month in which the amount was collected.

 6         (c)  For purposes of this subsection, the term "lender"

 7  means any of the following:

 8         1.  Any person who owns or has owned a private label

 9  credit card account that the person purchased directly from a

10  dealer who remitted the tax imposed under this chapter;

11         2.  Any person who owns or has owned a private label

12  credit card account pursuant to that person's contract

13  directly with the dealer who remitted the tax imposed under

14  this chapter; or

15         3.  Any person who is an affiliated entity, under 26

16  U.S.C. s. 1504, of a person described in subparagraph 1. or

17  subparagraph 2. or an assignee or other transferee of a person

18  described in subparagraph 1. or subparagraph 2.

19         (d)  For purposes of this subsection, the term "private

20  label credit card" means any charge card or credit card that

21  carries, refers to, or is branded with the name or logo of a

22  dealer and can be used for purchases from the dealer whose

23  name or logo appears on the card or for purchases from any of

24  the dealer's affiliates. For purposes of this paragraph, the

25  term "dealer's affiliates" means all entities affiliated with

26  the dealer under 26 U.S.C. s. 1504. In the case of a private

27  label credit card that also may be used to make purchases from

28  persons other than the dealer whose name or logo appears on

29  the card or the dealer's affiliates, the sales receipts of the

30  dealer and the dealer's affiliates must be capable of

31  identification apart from any receipts reflecting sales by

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    Florida Senate - 2007                            CS for SB 982
    577-2037-07




 1  such unrelated persons. Nothing in this subsection authorizes

 2  any credit or refund with respect to sales by such unrelated

 3  persons.

 4         (e)  Before a dealer or lender may take a credit or

 5  obtain a refund under this subsection, the lender and the

 6  dealer shall file a joint election with the department, signed

 7  by the dealer and lender, designating whether the dealer or

 8  lender is entitled to claim the credit or refund. This

 9  election may not be revoked unless a written notice, signed by

10  the dealer and lender who signed the election being revoked,

11  is filed with the department.

12         (f)  The dealer or lender shall maintain adequate

13  books, records, or other documentation supporting the

14  deduction taken for the bad debts found to be worthless for

15  which a credit was taken or a refund was claimed under this

16  subsection. If a dealer remits sales tax or use tax to this

17  state and one or more other states, the dealer or its lender

18  claiming any credits or refunds under this subsection may use

19  an apportionment method to substantiate the amount of tax

20  imposed under this chapter included in the bad debts to which

21  the credit or refund applies. The apportionment method must

22  use the dealer's Florida and non-Florida sales, the dealer's

23  taxable and nontaxable sales, and the amount of tax the dealer

24  remitted to this state. Alternatively, the dealer or lender

25  may treat a specified percentage of the private label credit

26  card accounts as giving rise to a credit or refund under this

27  subsection, which percentage is derived from a sampling of the

28  dealer's or lender's records in accordance with a methodology

29  agreed upon by the department and the dealer or lender.

30  

31  

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    Florida Senate - 2007                            CS for SB 982
    577-2037-07




 1         (g)  A lender as defined in paragraph (c) may have its

 2  credit for bad debts claimed on a consolidated sales and use

 3  tax return.

 4         (h)  The department may adopt rules pursuant to ss.

 5  120.536(1) and 120.54 governing the implementation of this

 6  subsection.

 7         (i)  This subsection shall not apply to any credit or

 8  refund claim presented under subsection (2) or subsection (3),

 9  any assessment or refund denial pertaining to a credit or

10  refund claim made under subsection (2) or subsection (3), or

11  any audit or administrative or judicial proceeding relating to

12  such credit or refund claims pending as of July 1, 2007.

13         Section 2.  This act shall take effect July 1, 2007.

14  

15          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
16                         Senate Bill 982

17                                 

18  The Committee Substitute for Senate Bill 982 differs from the
    bill as filed in the following ways:
19  
    -    A dealer or lender may claim a sales tax refund or sales
20       tax credit no later than 12 months from the date a
         worthless account was written off for federal income tax
21       purposes, rather than 12 months from the filing date of
         the federal income tax return on which the charge-off was
22       taken.

23  -    For clarity, an early reference to the process by which a
         dealer or lender elects to take the tax credit or tax
24       refund is cross-referenced to a description of the
         process later in the bill.
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