§ 44-18.1-21 Uniform rules for recovery ofbad debts. – Each member state shall use the following to provide a deduction for bad debtsto a seller. To the extent a member state provides a bad debt deduction to anyother party, the same procedures will apply. Each member state shall:
(A) Allow a deduction from taxable sales for bad debts. Anydeduction taken that is attributed to bad debts shall not include interest.
(B) Utilize the federal definition of "bad debt" in 26 U.S.C.§ 166 as the basis for calculating bad debt recovery. However, the amountcalculated pursuant to 26 U.S.C. § 166 shall be adjusted to exclude:financing charges or interest; sales or use taxes charged on the purchaseprice; uncollectable amounts on property that remain in the possession of theseller until the full purchase price is paid; expenses incurred in attemptingto collect any debt, and repossessed property.
(C) Allow bad debts to be deducted on the return for theperiod during which the bad debt is written off as uncollectable in theclaimant's books and records and is eligible to be deducted for federal incometax purposes. For purposes of this subsection, a claimant who is not requiredto file federal income tax returns may deduct a bad debt on a return filed forthe period in which the bad debt is written off as uncollectable in theclaimant's books and records and would be eligible for a bad debt deduction forfederal income tax purposes if the claimant was required to file a federalincome tax return.
(D) Require that, if a deduction is taken for a bad debt andthe debt is subsequently collected in whole or in part, the tax on the amountso collected must be paid and reported on the return filed for the period inwhich the collection is made.
(E) Provide that, when the amount of bad debt exceeds theamount of taxable sales for the period during which the bad debt is writtenoff, a refund claim may be filed within the member state's otherwise applicablestatute of limitations for refund claims; however, the statute of limitationsshall be measured from the due date of the return on which the bad debt couldfirst be claimed.
(F) Where filing responsibilities have been assumed by a CSP,allow the service provider to claim, on behalf of the seller, any bad debtallowance provided by this section. The CSP must credit or refund the fullamount of any bad debt allowance or refund received to the seller.
(G) Provide that, for the purposes of reporting a paymentreceived on a previously claimed bad debt, any payments made on a debt oraccount are applied first proportionally to the taxable price of the propertyor service and the sales tax thereon, and secondly to interest, servicecharges, and any other charges.
(H) In situations where the books and records of the partyclaiming the bad debt allowance support an allocation of the bad debts amongthe member states, permit the allocation.
§ 44-18.1-21 Uniform rules for recovery ofbad debts. – Each member state shall use the following to provide a deduction for bad debtsto a seller. To the extent a member state provides a bad debt deduction to anyother party, the same procedures will apply. Each member state shall:
(A) Allow a deduction from taxable sales for bad debts. Anydeduction taken that is attributed to bad debts shall not include interest.
(B) Utilize the federal definition of "bad debt" in 26 U.S.C.§ 166 as the basis for calculating bad debt recovery. However, the amountcalculated pursuant to 26 U.S.C. § 166 shall be adjusted to exclude:financing charges or interest; sales or use taxes charged on the purchaseprice; uncollectable amounts on property that remain in the possession of theseller until the full purchase price is paid; expenses incurred in attemptingto collect any debt, and repossessed property.
(C) Allow bad debts to be deducted on the return for theperiod during which the bad debt is written off as uncollectable in theclaimant's books and records and is eligible to be deducted for federal incometax purposes. For purposes of this subsection, a claimant who is not requiredto file federal income tax returns may deduct a bad debt on a return filed forthe period in which the bad debt is written off as uncollectable in theclaimant's books and records and would be eligible for a bad debt deduction forfederal income tax purposes if the claimant was required to file a federalincome tax return.
(D) Require that, if a deduction is taken for a bad debt andthe debt is subsequently collected in whole or in part, the tax on the amountso collected must be paid and reported on the return filed for the period inwhich the collection is made.
(E) Provide that, when the amount of bad debt exceeds theamount of taxable sales for the period during which the bad debt is writtenoff, a refund claim may be filed within the member state's otherwise applicablestatute of limitations for refund claims; however, the statute of limitationsshall be measured from the due date of the return on which the bad debt couldfirst be claimed.
(F) Where filing responsibilities have been assumed by a CSP,allow the service provider to claim, on behalf of the seller, any bad debtallowance provided by this section. The CSP must credit or refund the fullamount of any bad debt allowance or refund received to the seller.
(G) Provide that, for the purposes of reporting a paymentreceived on a previously claimed bad debt, any payments made on a debt oraccount are applied first proportionally to the taxable price of the propertyor service and the sales tax thereon, and secondly to interest, servicecharges, and any other charges.
(H) In situations where the books and records of the partyclaiming the bad debt allowance support an allocation of the bad debts amongthe member states, permit the allocation.
§ 44-18.1-21 Uniform rules for recovery ofbad debts. – Each member state shall use the following to provide a deduction for bad debtsto a seller. To the extent a member state provides a bad debt deduction to anyother party, the same procedures will apply. Each member state shall:
(A) Allow a deduction from taxable sales for bad debts. Anydeduction taken that is attributed to bad debts shall not include interest.
(B) Utilize the federal definition of "bad debt" in 26 U.S.C.§ 166 as the basis for calculating bad debt recovery. However, the amountcalculated pursuant to 26 U.S.C. § 166 shall be adjusted to exclude:financing charges or interest; sales or use taxes charged on the purchaseprice; uncollectable amounts on property that remain in the possession of theseller until the full purchase price is paid; expenses incurred in attemptingto collect any debt, and repossessed property.
(C) Allow bad debts to be deducted on the return for theperiod during which the bad debt is written off as uncollectable in theclaimant's books and records and is eligible to be deducted for federal incometax purposes. For purposes of this subsection, a claimant who is not requiredto file federal income tax returns may deduct a bad debt on a return filed forthe period in which the bad debt is written off as uncollectable in theclaimant's books and records and would be eligible for a bad debt deduction forfederal income tax purposes if the claimant was required to file a federalincome tax return.
(D) Require that, if a deduction is taken for a bad debt andthe debt is subsequently collected in whole or in part, the tax on the amountso collected must be paid and reported on the return filed for the period inwhich the collection is made.
(E) Provide that, when the amount of bad debt exceeds theamount of taxable sales for the period during which the bad debt is writtenoff, a refund claim may be filed within the member state's otherwise applicablestatute of limitations for refund claims; however, the statute of limitationsshall be measured from the due date of the return on which the bad debt couldfirst be claimed.
(F) Where filing responsibilities have been assumed by a CSP,allow the service provider to claim, on behalf of the seller, any bad debtallowance provided by this section. The CSP must credit or refund the fullamount of any bad debt allowance or refund received to the seller.
(G) Provide that, for the purposes of reporting a paymentreceived on a previously claimed bad debt, any payments made on a debt oraccount are applied first proportionally to the taxable price of the propertyor service and the sales tax thereon, and secondly to interest, servicecharges, and any other charges.
(H) In situations where the books and records of the partyclaiming the bad debt allowance support an allocation of the bad debts amongthe member states, permit the allocation.
