Senate Bill 7060 (2023) — Taxes on purchases made through private-label credit card programs

SB 7060

Florida Bills

Florida Senate - 2023 SB 7060 By the Committee on Finance and Tax 593-03942-23 20237060__ Page 1 of 4 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1

An act relating to taxes on purchases made through 2 private-label credit card programs; amending s. 3 212.17, F.S.; deleting the authority of a dealer, 4 under certain circumstances, to claim a credit for, or 5 obtain a refund of, sales tax remitted by the dealer 6 on the unpaid balance due on certain accounts and 7 receivables; deleting requirements, procedures, 8 limitations, and

definitions relating to such credits 9 and refunds; providing an effective date. 10 11 Be It Enacted by the Legislature of the State of Florida: 12 13

Section 1. Subsections (3) and (4) of

section 212.17, 14 Florida Statutes, are amended to read: 15 212.17 Tax credits or refunds.— 16

(3) Except as provided in subsection (4), A dealer who has 17 paid the tax imposed by this

chapter on tangible personal 18 property or services may take a credit or obtain a refund for 19 any tax paid by the dealer on the unpaid balance due on 20 worthless accounts within 12 months after the month in which the 21 bad debt has been charged off for federal income tax purposes. 22 If any accounts so charged off for which a credit or refund has 23 been obtained are subsequently, in whole or in part, paid to the 24 dealer, the amount so paid shall be included in the first return 25 filed after such collection and the tax paid accordingly. 26

(4) With respect to the payment of taxes on purchases made 27 through a private-label credit card program: 28 (

a) If consumer accounts or receivables are found to be 29 Florida Senate - 2023 SB 7060 593-03942-23 20237060__ Page 2 of 4 CODING: Words stricken are deletions; words underlined are additions. worthless or uncollectible, the dealer may claim a credit for, 30 or obtain a refund of, the tax remitted by the dealer on the 31 unpaid balance due if: 32 1. The accounts or receivables have been charged off as bad 33 debt on the lender’s books and records on or after January 1, 34 2014; 35 2.

A credit was not previously claimed and a refund was not 36 previously allowed on any portion of the accounts or 37 receivables; and 38 3. The credit or refund is claimed within 12 months after 39 the month in which the bad debt has been charged off by the 40 lender for federal income tax purposes. 41 (

b) If the dealer or the lender subsequently collects, in 42 whole or in part, the accounts or receivables for which a credit 43 or refund has been granted under paragraph (a), the dealer shall 44 include the taxable percentage of the amount collected in the 45 first return filed after the collection and pay the tax on the 46 portion of that amount for which a credit or refund was granted. 47 (

c) The credit or refund allowed includes all credit sale 48 transaction amounts that are outstanding in the specific 49 private-label credit card account or receivable at the time the 50 account or receivable is charged off, regardless of the date on 51 which the credit sale transaction actually occurred. 52 (

d) A dealer must use one of the following methods to 53 determine the amount of the credit or refund: 54 1. An apportionment method to substantiate the amount of 55 tax imposed under this

chapter which is included in the bad debt 56 to which the credit or refund applies. The method must use the 57 dealer’s Florida and non-Florida sales, the dealer’s taxable and 58 Florida Senate - 2023 SB 7060 593-03942-23 20237060__ Page 3 of 4 CODING: Words stricken are deletions; words underlined are additions. nontaxable sales, and the amount of tax the dealer remitted to 59 this state; or 60 2. A specified percentage of the accounts or receivables 61 giving rise to the credit or refund, which is derived from a 62 sampling of the dealer’s or lender’s records in accordance with 63 a methodology agreed upon by the department and the dealer. 64 (

e) For purposes of computing the credit or refund, 65 payments on the accounts or receivables shall be allocated based 66 on the terms and conditions of the contract between the dealer 67 or lender and the consumer. 68 (

f) The credit or refund for tax on bad debt may be claimed 69 on any return filed by an entity related by a direct or indirect 70 common ownership of 50 percent or more. 71 (

g) The amount of the credit or refund that a dealer is 72 eligible to recover under this subsection is limited to 64.4 73 percent of the tax paid to the department which is attributable 74 to bad debt. 75 (

h) As used in this subsection, the term: 76 1. “Dealer’s affiliates” means an entity affiliated with 77 the dealer under 26 U.S.C. s. 1504 or an entity that would be an 78 affiliate under that

section if the entity were a corporation. 79 2. “Lender” means a person who owns or has owned a private-80 label credit card account or an interest in a private-label 81 credit card receivable that: 82 a. The person purchased directly from a dealer who remitted 83 the tax imposed under this

chapter or from the dealer’s 84 affiliates, or that was transferred from a third party; 85 b. The person originated pursuant to that person’s contract 86 with a dealer who remitted the tax imposed under this

chapter or 87 Florida Senate - 2023 SB 7060 593-03942-23 20237060__ Page 4 of 4 CODING: Words stricken are deletions; words underlined are additions. with the dealer’s affiliates; or 88 c.

Is affiliated in the manner described under 26 U.S.C. s. 89 1504, regardless of whether the different entities are 90 corporations, with a person described in sub-subparagraph a. or 91 sub-subparagraph b. or with an assignee or other transferee of 92 such person. 93 3. “Private-label credit card” means a charge card or 94 credit card that carries, refers to, or is branded with the name 95 or logo of a dealer and can be used for purchases from the 96 dealer whose name or logo appears on the card or for purchases 97 from the dealer’s affiliates or franchises. 98

Section 2. This act shall take effect July 1, 2023. 99

Document details

Collection	Florida Bills
Citation	SB 7060
Type	bill
Language	en
Format	pdf
Source	FL_SENATE
Identifier	e0258184d861520bb9faaf23692c4bf1dad65c37

Source file is stored in the law ingest library (pdf).