Texas 2025 - 89th Regular

Texas House Bill HB5250 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R15375 CJD-F
2	2	By: Longoria H.B. No. 5250
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a refund of motor vehicle sales taxes paid on certain
10	10	bad debt.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter C, Chapter 152, Tax Code, is amended
13	13	by adding Section 152.049 to read as follows:
14	14	Sec. 152.049. REFUND FOR TAX PAID ON BAD DEBT. (a) In this
15	15	section:
16	16	(1) "Bad debt" means the unpaid balance of an account
17	17	associated with a retail installment transaction that was charged
18	18	off for federal income tax purposes.
19	19	(2) "Lender" means a person:
20	20	(A) that holds or previously held a retail
21	21	account purchased directly from a seller required by this chapter
22	22	to collect the sales tax imposed by Section 152.021 who remitted the
23	23	tax to the tax assessor-collector; and
24	24	(B) that:
25	25	(i) is an authorized lender under Chapter
26	26	341, Finance Code; or
27	27	(ii) holds a motor vehicle sales finance
28	28	license under Subchapter F, Chapter 348, Finance Code.
29	29	(3) "Passenger car" means a motor vehicle used to
30	30	transport persons and designed to accommodate 10 or fewer
31	31	passengers, including the operator.
32	32	(4) "Retail installment transaction" has the meaning
33	33	assigned by Section 348.001, Finance Code.
34	34	(b) A seller who is required by this chapter to collect the
35	35	sales tax imposed by Section 152.021 may file a claim with and is
36	36	entitled to receive from the comptroller a refund of sales taxes
37	37	paid on the seller's bad debt in the amount computed under
38	38	Subsection (c) if:
39	39	(1) the tax was remitted to the tax assessor-collector
40	40	on a passenger car sold in a retail installment transaction;
41	41	(2) the account associated with the debt is determined
42	42	to be worthless; and
43	43	(3) the account associated with the debt is written
44	44	off as a bad debt on the accounting books and actually charged off
45	45	for federal tax purposes.
46	46	(c) The amount of the refund is equal to the amount computed
47	47	by:
48	48	(1) allocating the bad debt between taxable and
49	49	nontaxable charges in a manner that is proportional to the
50	50	allocation of taxable and nontaxable charges the purchaser agreed
51	51	to pay in a retail installment transaction; and
52	52	(2) multiplying the amount of the bad debt allocated
53	53	to taxable charges as determined under Subdivision (1) by the tax
54	54	rate prescribed by Section 152.021.
55	55	(d) If the seller assigns the retail installment contract to
56	56	a lender in a retail installment transaction, the lender may file a
57	57	claim with and is entitled to receive from the comptroller the
58	58	refund under Subsection (b), provided that:
59	59	(1) the requirements of Subsection (b) are satisfied
60	60	by the seller or the lender; and
61	61	(2) the seller has not received a refund for sales
62	62	taxes paid on the bad debt that is the subject of the lender's
63	63	claim.
64	64	(e) If after receiving a refund under this section a seller
65	65	or lender collects all or part of the bad debt for which the seller
66	66	or lender claimed the refund, the seller or lender shall deduct from
67	67	the next claim for a refund the seller or lender files under this
68	68	section an amount equal to the amount computed by:
69	69	(1) allocating the amount collected by the seller or
70	70	lender between taxable and nontaxable charges in the same manner as
71	71	the bad debt is allocated under Subsection (c)(1); and
72	72	(2) multiplying the amount collected by the seller or
73	73	lender allocated to taxable charges as determined under Subdivision
74	74	(1) by the tax rate prescribed by Section 152.021.
75	75	(f) A seller or lender claiming a refund under this section
76	76	must maintain and make available to the comptroller the following
77	77	information relating to the retail installment transaction to which
78	78	the refund relates:
79	79	(1) the name and general distinguishing number of the
80	80	seller who remitted the sales tax to the tax assessor-collector;
81	81	(2) the amount the purchaser agreed to pay in the
82	82	retail installment transaction;
83	83	(3) a copy of the application for registration or
84	84	application for title submitted to the tax assessor-collector;
85	85	(4) a copy of the title receipt issued by the tax
86	86	assessor-collector; and
87	87	(5) any additional information requested by the
88	88	comptroller to verify the refund claim.
89	89	(g) This section does not apply to a seller-financed sale.
90	90	SECTION 2. The change in law made by this Act does not
91	91	affect tax liability accruing before the effective date of this
92	92	Act. That liability continues in effect as if this Act had not been
93	93	enacted, and the former law is continued in effect for the
94	94	collection of taxes due and for civil and criminal enforcement of
95	95	the liability for those taxes.
96	96	SECTION 3. This Act takes effect September 1, 2025.