| 1 | A bill to be entitled |
| 2 | An act relating to sales and use tax credits or refunds; |
| 3 | amending s. 212.17, F.S.; authorizing dealers to take |
| 4 | certain credits or obtain refund of taxes paid for |
| 5 | worthless private label credit card accounts; specifying |
| 6 | conditions; providing for phased application; providing |
| 7 | for remittances of taxes collected on such accounts; |
| 8 | providing definitions; requiring dealers and lenders to |
| 9 | file a joint election to receive the credit or refund; |
| 10 | providing recordkeeping requirements; authorizing the |
| 11 | Department of Revenue to adopt rules; specifying |
| 12 | nonapplication to certain claims for credits or refunds; |
| 13 | providing for future repeal unless reviewed and saved from |
| 14 | repeal by reenactment; providing an effective date. |
| 15 |
|
| 16 | Be It Enacted by the Legislature of the State of Florida: |
| 17 |
|
| 18 | Section 1. Subsection (8) is added to section 212.17, |
| 19 | Florida Statutes, to read: |
| 20 | 212.17 Credits for returned goods, rentals, or admissions; |
| 21 | goods acquired for dealer's own use and subsequently resold; |
| 22 | worthless private label credit card accounts; additional powers |
| 23 | of department.-- |
| 24 | (8)(a) In the case of private label credit card accounts |
| 25 | found to be worthless and deductible as bad debts for federal |
| 26 | income tax purposes, a dealer or lender may take a credit or |
| 27 | obtain a refund of the taxes previously paid by the dealer under |
| 28 | this chapter on the unpaid balance due on the worthless accounts |
| 29 | if a proper election under paragraph (f) is made by the dealer |
| 30 | and lender and the following conditions are met: |
| 31 | 1. No credit or refund was previously claimed or allowed |
| 32 | on any portion of the account. |
| 33 | 2. The accounts have been found worthless and are |
| 34 | deductible as bad debts for federal income tax purposes by the |
| 35 | lender or any entity affiliated with the lender under 26 U.S.C. |
| 36 | s. 1504. |
| 37 | 3. The accounts are found to be worthless on or after |
| 38 | January 1, 2008, and the credit or refund is claimed not later |
| 39 | than 12 months following the date on which the accounts are |
| 40 | deducted as bad debts for federal income tax purposes. |
| 41 | (b) The credit or refund authorized by this subsection |
| 42 | shall apply as follows: |
| 43 | 1. Beginning January 1, 2008, the credit or refund |
| 44 | authorized by this subsection shall be 25 percent of the tax |
| 45 | paid to the department attributed to the bad debt. |
| 46 | 2. Beginning January 1, 2009, the credit or refund |
| 47 | authorized by this subsection shall be 50 percent of the tax |
| 48 | paid to the department attributed to the bad debt. |
| 49 | 3. Beginning January 1, 2010, the credit or refund |
| 50 | authorized by this subsection shall be 75 percent of the tax |
| 51 | paid to the department attributed to the bad debt. |
| 52 | 4. Beginning January 1, 2011, the credit or refund |
| 53 | authorized by this subsection shall be 100 percent of the tax |
| 54 | paid to the department attributed to the bad debt. |
| 55 | (c) If a dealer or lender thereafter collects in whole or |
| 56 | in part any account for which a credit or refund has been |
| 57 | obtained under this subsection, the dealer or the lender shall |
| 58 | include the amount collected and account for tax on that amount |
| 59 | in the earlier of the dealer's or lender's first return or |
| 60 | refund claim filed after the collection or a statement filed |
| 61 | with the department by the 20th day of the month following the |
| 62 | month in which the amount was collected. |
| 63 | (d) For purposes of this subsection, the term "lender" |
| 64 | means any of the following: |
| 65 | 1. Any person who owns or has owned a private label credit |
| 66 | card account that the person purchased directly from a dealer |
| 67 | who remitted the tax imposed under this chapter; |
| 68 | 2. Any person who owns or has owned a private label credit |
| 69 | card account pursuant to that person's contract directly with |
| 70 | the dealer who remitted the tax imposed under this chapter; or |
| 71 | 3. Any person who is an affiliated entity, under 26 U.S.C. |
| 72 | s. 1504, of a person described in subparagraph 1. or |
| 73 | subparagraph 2. or an assignee or other transferee of a person |
| 74 | described in subparagraph 1. or subparagraph 2. |
| 75 | (e) For purposes of this subsection, the term "private |
| 76 | label credit card" means any charge card or credit card that |
| 77 | carries, refers to, or is branded with the name or logo of a |
| 78 | dealer and can be used for purchases from the dealer whose name |
| 79 | or logo appears on the card or for purchases from any of the |
| 80 | dealer's affiliates. For purposes of this paragraph, the term |
| 81 | "dealer's affiliates" means all entities affiliated with the |
| 82 | dealer under 26 U.S.C. s. 1504. In the case of a private label |
| 83 | credit card that also may be used to make purchases from persons |
| 84 | other than the dealer whose name or logo appears on the card or |
| 85 | the dealer's affiliates, the sales receipts of the dealer and |
| 86 | the dealer's affiliates must be capable of identification apart |
| 87 | from any receipts reflecting sales by such unrelated persons. |
| 88 | Nothing in this subsection authorizes any credit or refund with |
| 89 | respect to sales by such unrelated persons. |
| 90 | (f) Before a dealer or lender may take a credit or obtain |
| 91 | a refund under this subsection, the lender and the dealer shall |
| 92 | file a joint election with the department, signed by the dealer |
| 93 | and lender, designating whether the dealer or lender is entitled |
| 94 | to claim the credit or refund. This election may not be revoked |
| 95 | unless a written notice, signed by the dealer and lender who |
| 96 | signed the election being revoked, is filed with the department. |
| 97 | (g) The dealer or lender shall maintain adequate books, |
| 98 | records, or other documentation supporting the deduction taken |
| 99 | for the bad debts found to be worthless for which a credit was |
| 100 | taken or a refund was claimed under this subsection. If a dealer |
| 101 | remits sales tax or use tax to this state and one or more other |
| 102 | states, the dealer or its lender claiming any credits or refunds |
| 103 | under this subsection may use an apportionment method to |
| 104 | substantiate the amount of tax imposed under this chapter |
| 105 | included in the bad debts to which the credit or refund applies. |
| 106 | The apportionment method must use the dealer's Florida and non- |
| 107 | Florida sales, the dealer's taxable and nontaxable sales, and |
| 108 | the amount of tax the dealer remitted to this state. |
| 109 | Alternatively, the dealer or lender may treat a specified |
| 110 | percentage of the private label credit card accounts as giving |
| 111 | rise to a credit or refund under this subsection, which |
| 112 | percentage is derived from a sampling of the dealer's or |
| 113 | lender's records in accordance with a methodology agreed upon by |
| 114 | the department and the dealer or lender. |
| 115 | (h) A lender as defined in paragraph (d) may have its |
| 116 | credit for bad debts claimed on a consolidated sales and use tax |
| 117 | return. |
| 118 | (i) The department may adopt rules pursuant to ss. |
| 119 | 120.536(1) and 120.54 governing the implementation of this |
| 120 | subsection. |
| 121 | (j) This subsection shall not apply to any credit or |
| 122 | refund claim presented under subsection (2) or subsection (3), |
| 123 | any assessment or refund denial pertaining to a credit or refund |
| 124 | claim made under subsection (2) or subsection (3), or any audit |
| 125 | or administrative or judicial proceeding relating to such credit |
| 126 | or refund claims pending as of January 1, 2008. |
| 127 | (k) This subsection is repealed December 31, 2010, unless |
| 128 | reviewed and saved from repeal through reenactment by the |
| 129 | Legislature. |
| 130 | Section 2. This act shall take effect January 1, 2008. |