HB 307

1
A bill to be entitled
2An act relating to sales and use tax credits or refunds;
3amending s. 212.17, F.S.; authorizing dealers to take
4certain credits or obtain refund of taxes paid for
5worthless private label credit card accounts; specifying
6conditions; providing for remittances of taxes collected
7on such accounts; providing definitions; requiring dealers
8and lenders to file a joint election to receive the credit
9or refund; providing recordkeeping requirements;
10authorizing the Department of Revenue to adopt rules;
11specifying nonapplication to certain claims for credits or
12refunds; providing an effective date.
13
14Be It Enacted by the Legislature of the State of Florida:
15
16     Section 1.  Subsection (8) is added to section 212.17,
17Florida Statutes, to read:
18     212.17  Credits for returned goods, rentals, or admissions;
19goods acquired for dealer's own use and subsequently resold;
20worthless private label credit card accounts; additional powers
21of department.--
22     (8)(a)  In the case of private label credit card accounts
23found to be worthless and deductible as bad debts for federal
24income tax purposes, a dealer or lender may take a credit or
25obtain a refund of the taxes previously paid by the dealer under
26this chapter on the unpaid balance due on the worthless accounts
27if a proper election is made by the dealer and lender and the
28following conditions are met:
29     1.  No credit or refund was previously claimed or allowed
30on any portion of the account.
31     2.  The accounts have been found worthless and are
32deductible as bad debts for federal income tax purposes by the
33lender or any entity affiliated with the lender under 26 U.S.C.
34s. 1504.
35     3.  The accounts are found to be worthless on or after July
361, 2007, and the credit or refund is claimed not later than 12
37months following the date on which the federal income tax return
38on which the accounts were deducted was filed.
39     (b)  If a dealer or lender thereafter collects in whole or
40in part any account for which a credit or refund has been
41obtained under this subsection, the dealer or the lender shall
42include the amount collected and account for tax on that amount
43in the earlier of the dealer's or lender's first return or
44refund claim filed after the collection or a statement filed
45with the department by the 20th day of the month following the
46month in which the amount was collected.
47     (c)  For purposes of this subsection, the term "lender"
48means any of the following:
49     1.  Any person who owns or has owned a private label credit
50card account that the person purchased directly from a dealer
51who remitted the tax imposed under this chapter;
52     2.  Any person who owns or has owned a private label credit
53card account pursuant to that person's contract directly with
54the dealer who remitted the tax imposed under this chapter; or
55     3.  Any person who is an affiliated entity, under 26 U.S.C.
56s. 1504, of a person described in subparagraph 1. or
57subparagraph 2. or an assignee or other transferee of a person
58described in subparagraph 1. or subparagraph 2.
59     (d)  For purposes of this subsection, the term "private
60label credit card" means any charge card or credit card that
61carries, refers to, or is branded with the name or logo of a
62dealer and can be used for purchases from the dealer whose name
63or logo appears on the card or for purchases from any of the
64dealer's affiliates. For purposes of this paragraph, the term
65"dealer's affiliates" means all entities affiliated with the
66dealer under 26 U.S.C. s. 1504. In the case of a private label
67credit card that also may be used to make purchases from persons
68other than the dealer whose name or logo appears on the card or
69the dealer's affiliates, the sales receipts of the dealer and
70the dealer's affiliates must be capable of identification apart
71from any receipts reflecting sales by such unrelated persons.
72Nothing in this subsection authorizes any credit or refund with
73respect to sales by such unrelated persons.
74     (e)  Before a dealer or lender may take a credit or obtain
75a refund under this subsection, the lender and the dealer shall
76file a joint election with the department, signed by the dealer
77and lender, designating whether the dealer or lender is entitled
78to claim the credit or refund. This election may not be revoked
79unless a written notice, signed by the dealer and lender who
80signed the election being revoked, is filed with the department.
81     (f)  The dealer or lender shall maintain adequate books,
82records, or other documentation supporting the deduction taken
83for the bad debts found to be worthless for which a credit was
84taken or a refund was claimed under this subsection. If a dealer
85remits sales tax or use tax to this state and one or more other
86states, the dealer or its lender claiming any credits or refunds
87under this subsection may use an apportionment method to
88substantiate the amount of tax imposed under this chapter
89included in the bad debts to which the credit or refund applies.
90The apportionment method must use the dealer's Florida and non-
91Florida sales, the dealer's taxable and nontaxable sales, and
92the amount of tax the dealer remitted to this state.
93Alternatively, the dealer or lender may treat a specified
94percentage of the private label credit card accounts as giving
95rise to a credit or refund under this subsection, which
96percentage is derived from a sampling of the dealer's or
97lender's records in accordance with a methodology agreed upon by
98the department and the dealer or lender.
99     (g)  A lender as defined in paragraph (c) may have its
100credit for bad debts claimed on a consolidated sales and use tax
101return.
102     (h)  The department may adopt rules pursuant to ss.
103120.536(1) and 120.54 governing the implementation of this
104subsection.
105     (i)  This subsection shall not apply to any credit or
106refund claim presented under subsection (2) or subsection (3),
107any assessment or refund denial pertaining to a credit or refund
108claim made under subsection (2) or subsection (3), or any audit
109or administrative or judicial proceeding relating to such credit
110or refund claims pending as of July 1, 2007.
111     Section 2.  This act shall take effect July 1, 2007.


CODING: Words stricken are deletions; words underlined are additions.