Florida Senate - 2023 SB 7060 By the Committee on Finance and Tax 593-03942-23 20237060__ 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: 16 212.17Tax 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 lenders 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 dealers Florida and non-Florida sales, the dealers 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 dealers or lenders 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.Dealers 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 dealers 85 affiliates, or that was transferred from a third party; 86 b.The person originated pursuant to that persons contract 87 with a dealer who remitted the tax imposed under this chapter or 88 with the dealers 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 dealers affiliates or franchises. 99 Section 2.This act shall take effect July 1, 2023.