Florida Senate - 2023                   (Proposed Bill) SPB 7060
       
       
        
       FOR CONSIDERATION By the Committee on Finance and Tax
       
       
       
       
       
       593-03808A-23                                         20237060pb
    1                        A bill to be entitled                      
    2         An act relating to taxes on purchases made through
    3         private-label credit card programs; amending s.
    4         212.17, F.S.; deleting the authority of a dealer,
    5         under certain circumstances, to claim a credit for, or
    6         obtain a refund of, sales tax remitted by the dealer
    7         on the unpaid balance due on certain accounts and
    8         receivables; deleting requirements, procedures,
    9         limitations, and definitions relating to such credits
   10         and refunds; providing an effective date.
   11          
   12  Be It Enacted by the Legislature of the State of Florida:
   13  
   14         Section 1. Subsections (3) and (4) of section 212.17,
   15  Florida Statutes, are amended to read:
   16         212.17 Tax credits or refunds.—
   17         (3) Except as provided in subsection (4), A dealer who has
   18  paid the tax imposed by this chapter on tangible personal
   19  property or services may take a credit or obtain a refund for
   20  any tax paid by the dealer on the unpaid balance due on
   21  worthless accounts within 12 months after the month in which the
   22  bad debt has been charged off for federal income tax purposes.
   23  If any accounts so charged off for which a credit or refund has
   24  been obtained are subsequently, in whole or in part, paid to the
   25  dealer, the amount so paid shall be included in the first return
   26  filed after such collection and the tax paid accordingly.
   27         (4) With respect to the payment of taxes on purchases made
   28  through a private-label credit card program:
   29         (a) If consumer accounts or receivables are found to be
   30  worthless or uncollectible, the dealer may claim a credit for,
   31  or obtain a refund of, the tax remitted by the dealer on the
   32  unpaid balance due if:
   33         1. The accounts or receivables have been charged off as bad
   34  debt on the lender’s books and records on or after January 1,
   35  2014;
   36         2. A credit was not previously claimed and a refund was not
   37  previously allowed on any portion of the accounts or
   38  receivables; and
   39         3. The credit or refund is claimed within 12 months after
   40  the month in which the bad debt has been charged off by the
   41  lender for federal income tax purposes.
   42         (b) If the dealer or the lender subsequently collects, in
   43  whole or in part, the accounts or receivables for which a credit
   44  or refund has been granted under paragraph (a), the dealer shall
   45  include the taxable percentage of the amount collected in the
   46  first return filed after the collection and pay the tax on the
   47  portion of that amount for which a credit or refund was granted.
   48         (c) The credit or refund allowed includes all credit sale
   49  transaction amounts that are outstanding in the specific
   50  private-label credit card account or receivable at the time the
   51  account or receivable is charged off, regardless of the date on
   52  which the credit sale transaction actually occurred.
   53         (d) A dealer must use one of the following methods to
   54  determine the amount of the credit or refund:
   55         1. An apportionment method to substantiate the amount of
   56  tax imposed under this chapter which is included in the bad debt
   57  to which the credit or refund applies. The method must use the
   58  dealer’s Florida and non-Florida sales, the dealer’s taxable and
   59  nontaxable sales, and the amount of tax the dealer remitted to
   60  this state; or
   61         2. A specified percentage of the accounts or receivables
   62  giving rise to the credit or refund, which is derived from a
   63  sampling of the dealer’s or lender’s records in accordance with
   64  a methodology agreed upon by the department and the dealer.
   65         (e) For purposes of computing the credit or refund,
   66  payments on the accounts or receivables shall be allocated based
   67  on the terms and conditions of the contract between the dealer
   68  or lender and the consumer.
   69         (f) The credit or refund for tax on bad debt may be claimed
   70  on any return filed by an entity related by a direct or indirect
   71  common ownership of 50 percent or more.
   72         (g) The amount of the credit or refund that a dealer is
   73  eligible to recover under this subsection is limited to 64.4
   74  percent of the tax paid to the department which is attributable
   75  to bad debt.
   76         (h) As used in this subsection, the term:
   77         1. “Dealer’s affiliates” means an entity affiliated with
   78  the dealer under 26 U.S.C. s. 1504 or an entity that would be an
   79  affiliate under that section if the entity were a corporation.
   80         2. “Lender” means a person who owns or has owned a private
   81  label credit card account or an interest in a private-label
   82  credit card receivable that:
   83         a. The person purchased directly from a dealer who remitted
   84  the tax imposed under this chapter or from the dealer’s
   85  affiliates, or that was transferred from a third party;
   86         b. The person originated pursuant to that person’s contract
   87  with a dealer who remitted the tax imposed under this chapter or
   88  with the dealer’s affiliates; or
   89         c. Is affiliated in the manner described under 26 U.S.C. s.
   90  1504, regardless of whether the different entities are
   91  corporations, with a person described in sub-subparagraph a. or
   92  sub-subparagraph b. or with an assignee or other transferee of
   93  such person.
   94         3. “Private-label credit card” means a charge card or
   95  credit card that carries, refers to, or is branded with the name
   96  or logo of a dealer and can be used for purchases from the
   97  dealer whose name or logo appears on the card or for purchases
   98  from the dealer’s affiliates or franchises.
   99         Section 2. This act shall take effect July 1, 2023.