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 remittances of taxes collected

7

on such accounts; providing definitions; requiring dealers

8

and lenders to file a joint election to receive the credit

9

or refund; providing recordkeeping requirements;

10

authorizing the Department of Revenue to adopt rules;

11

specifying nonapplication to certain claims for credits or

12

refunds; providing an effective date.

13

14

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

15

16

     Section 1.  Section 212.17, Florida Statutes, is amended to

17

read:

18

     212.17  Credits for returned goods, rentals, or admissions;

19

goods acquired for dealer's own use and subsequently resold;

20

worthless private-label credit card accounts; additional powers

21

of department.--

22

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

23

the purchaser or consumer after the tax imposed by this chapter

24

has been collected from or charged to the account of the consumer

25

or user, the dealer shall be entitled to reimbursement of the

26

amount of tax collected or charged by the dealer, in the manner

27

prescribed by the department.

28

     (b)  A registered dealer that purchases property for the

29

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

30

subsequent to acquisition without ever having used the property

31

is entitled to reimbursement, in the manner prescribed by the

32

department, of the amount of tax paid on the property's

33

acquisition.

34

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

35

department, the dealer may deduct the same in submitting his or

36

her return upon receipt of a signed statement of the dealer as to

37

the gross amount of such refunds during the period covered by

38

said signed statement, which period shall not be longer than 90

39

days. The department shall issue to the dealer an official credit

40

memorandum equal to the net amount remitted by the dealer for

41

such tax collected or paid. Such memorandum shall be accepted by

42

the department at full face value from the dealer to whom it is

43

issued, in the remittance for subsequent taxes accrued under the

44

provisions of this chapter. If a dealer has retired from business

45

and has filed a final return, a refund of tax may be made if it

46

can be established to the satisfaction of the department that the

47

tax was not due.

48

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

49

on tangible personal property sold under a retained title,

50

conditional sale, or similar contract, or under a contract

51

wherein the dealer retains a security interest in the property

52

pursuant to chapter 679, may take credit or obtain a refund for

53

the tax paid by the dealer on the unpaid balance due him or her

54

when he or she repossesses (with or without judicial process) the

55

property within 12 months following the month in which the

56

property was repossessed. When such repossessed property is

57

resold, the sale is subject in all respects to the tax imposed by

58

this chapter.

59

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

60

on tangible personal property or services may take a credit or

61

obtain a refund for any tax paid by the dealer on the unpaid

62

balance due on worthless accounts within 12 months following the

63

month in which the bad debt has been charged off for federal

64

income tax purposes. If any accounts so charged off for which a

65

credit or refund has been obtained are thereafter in whole or in

66

part paid to the dealer, the amount so paid shall be included in

67

the first return filed after such collection and the tax paid

68

accordingly.

69

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

70

furnish to all dealers, except dealers filing through electronic

71

data interchange, or make available or prescribe to the dealers,

72

all necessary forms for filing returns and instructions to ensure

73

a full collection from dealers and an accounting for the taxes

74

due, but failure of any dealer to secure such forms does not

75

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

76

the manner provided.

77

     (b)  The department shall prescribe the format and

78

instructions necessary for filing returns in a manner that is

79

initiated through an electronic data interchange to ensure a full

80

collection from dealers and an accounting for the taxes due. The

81

failure of any dealer to use such format does not relieve the

82

dealer from the payment of the tax at the time and in the manner

83

provided.

84

     (5)  The department and its assistants are hereby authorized

85

and empowered to administer the oath for the purpose of enforcing

86

and administering the provisions of this chapter.

87

     (6)  The department has authority to adopt rules pursuant to

88

ss. 120.536(1) and 120.54 to enforce the provisions of this

89

chapter.

90

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

91

rental payments or payments for services are made and thereafter

92

returned to the payors after the taxes thereon have been paid,

93

shall return or credit the taxpayer for taxes so paid on the

94

moneys returned in the same manner as is provided for returns or

95

credits of taxes where purchases or tangible personal property

96

are returnable to a dealer.

97

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

98

found to be worthless and deductible as bad debts for federal

99

income tax purposes, a dealer or lender may take a credit or

100

obtain a refund of the taxes previously paid by the dealer under

101

this chapter on the unpaid balance due on the worthless accounts

102

if a proper election under paragraph (e) is made by the dealer

103

and lender and the following conditions are met:

104

     1. No credit or refund was previously claimed or allowed on

105

any portion of the account.

106

     2. The accounts have been found worthless and are

107

deductible as bad debts for federal income tax purposes by the

108

lender or any entity affiliated with the lender under 26 U.S.C.

109

s. 1504.

110

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

111

1, 2008, and the credit or refund is claimed not later than 12

112

months following the date on which the accounts are charged off

113

for federal income tax purposes.

114

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

115

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

116

obtained under this subsection, the dealer or the lender shall

117

include the amount collected and account for tax on that amount

118

in the earlier of the dealer's or lender's first return or refund

119

claim filed after the collection or a statement filed with the

120

department by the 20th day of the month following the month in

121

which the amount was collected.

122

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

123

means any of the following:

124

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

125

card account that the person purchased directly from a dealer who

126

remitted the tax imposed under this chapter;

127

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

128

card account pursuant to that person's contract directly with the

129

dealer who remitted the tax imposed under this chapter; or

130

     3. Any person who is an affiliated entity, under 26 U.S.C.

131

s. 1504, of a person described in subparagraph 1. or subparagraph

132

2. or an assignee or other transferee of a person described in

133

subparagraph 1. or subparagraph 2.

134

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

135

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

136

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

137

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

138

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

139

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

140

"dealer's affiliates" means all entities affiliated with the

141

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

142

credit card that also may be used to make purchases from persons

143

other than the dealer whose name or logo appears on the card or

144

the dealer's affiliates, the sales receipts of the dealer and the

145

dealer's affiliates must be capable of identification apart from

146

any receipts reflecting sales by such unrelated persons. This

147

subsection does not authorize any credit or refund with respect

148

to sales by such unrelated persons.

149

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

150

refund under this subsection, the lender and the dealer shall

151

file a joint election with the department, signed by the dealer

152

and lender, designating whether the dealer or lender is entitled

153

to claim the credit or refund. This election may not be revoked

154

unless a written notice, signed by the dealer and lender who

155

signed the election being revoked, is filed with the department.

156

     (f) The dealer or lender shall maintain adequate books,

157

records, or other documentation supporting the deduction taken

158

for the bad debts found to be worthless for which a credit was

159

taken or a refund was claimed under this subsection. If a dealer

160

remits sales tax or use tax to this state and one or more other

161

states, the dealer or its lender claiming any credits or refunds

162

under this subsection may use an apportionment method to

163

substantiate the amount of tax imposed under this chapter

164

included in the bad debts to which the credit or refund applies.

165

The apportionment method must use the dealer's Florida and non-

166

Florida sales, the dealer's taxable and nontaxable sales, and the

167

amount of tax the dealer remitted to this state. Alternatively,

168

the dealer or lender may treat a specified percentage of the

169

private-label credit card accounts as giving rise to a credit or

170

refund under this subsection, which percentage is derived from a

171

sampling of the dealer's or lender's records in accordance with a

172

methodology agreed upon by the department and the dealer or

173

lender.

174

     (g) A lender may have its credit for bad debts claimed on a

175

consolidated sales and use tax return.

176

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

177

120.536(1) and 120.54 to administer this subsection.

178

     (i) This subsection does not apply to any credit or refund

179

claim presented under subsection (2) or subsection (3), any

180

assessment or refund denial pertaining to a credit or refund

181

claim made under subsection (2) or subsection (3), or any audit

182

or administrative or judicial proceeding relating to such credit

183

or refund claims pending as of July 1, 2008.

184

     Section 2.  This act shall take effect July 1, 2008.