‘‘(b) CREDITS NOT ADDITIVE.—Only one credit al-
lowed by chapter 2 may be taken with respect to any par-
ticular gross payment. 
‘‘SEC. 202. BUSINESS USE CONVERSION CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 201, a 
person’s business use conversion credit for any month is 
the aggregate of the amounts determined under subsection 
(b) with respect to taxable property and services— 
‘‘(1) on which tax was imposed by section 101 
(and actually paid), and 
‘‘(2) which commenced to be 95 percent or 
more used during such month for business purposes 
(within the meaning of section 102(b)). 
‘‘(b) AMOUNT OF CREDIT.—The amount determined 
under this paragraph with respect to any taxable property 
or service is the lesser of— 
‘‘(1) the product of— 
‘‘(A) the rate imposed by section 101, and 
‘‘(B) the quotient that is— 
‘‘(i) the fair market value of the prop-
erty or service when its use is converted, 
divided by 
‘‘(ii) the quantity that is 1 minus the 
tax rate imposed by section 101, or
‘‘(2) the amount of tax paid with respect to 
such taxable property or service, including the 
amount, if any, determined in accordance with sec-
tion 705 (relating to mixed use property). 
‘‘SEC. 203. INTERMEDIATE AND EXPORT SALES CREDIT. 
‘‘For purposes of section 201, a person’s intermediate 
and export sales credit is the amount of sales tax paid 
on the purchase of any taxable property or service pur-
chased for— 
‘‘(1) a business purpose in a trade or business 
(as defined in section 102(b)), or 
‘‘(2) export from the United States for use or 
consumption outside the United States. 
‘‘SEC. 204. ADMINISTRATION CREDIT. 
‘‘(a) IN GENERAL.—Every person filing a timely 
monthly report (with regard to extensions) in compliance 
with section 501 shall be entitled to a taxpayer adminis-
trative credit equal to the greater of— 
‘‘(1) $200, or 
‘‘(2) one-quarter of 1 percent of the tax remit-
ted. 
‘‘(b) LIMITATION.—The credit allowed under this sec-
tion shall not exceed 20 percent of the tax due to be remit-
ted prior to the application of any credit or credits per-
mitted by section 201.
‘‘SEC. 205. BAD DEBT CREDIT. 
‘‘(a) FINANCIAL INTERMEDIATION SERVICES.—Any 
person who has experienced a bad debt (other than unpaid 
invoices within the meaning of subsection (b)) shall be en-
titled to a credit equal to the product of— 
‘‘(1) the rate imposed by section 101, and 
‘‘(2) the quotient that is— 
‘‘(A) the amount of the bad debt (as de-
fined in section 802), divided by 
‘‘(B) the quantity that is 1 minus the rate 
imposed by section 101. 
‘‘(b) UNPAID INVOICES.—Any person electing the ac-
crual method pursuant to section 503 that has with re-
spect to a transaction— 
‘‘(1) invoiced the tax imposed by section 101, 
‘‘(2) remitted the invoiced tax, 
‘‘(3) actually delivered the taxable property or 
performed the taxable services invoiced, and 
‘‘(4) not been paid 180 days after date the in-
voice was due to be paid, 
shall be entitled to a credit equal to the amount of tax 
remitted and unpaid by the purchaser. 
‘‘(c) SUBSEQUENT PAYMENT.—Any payment made 
with respect to a transaction subsequent to a section 205 
credit being taken with respect to that transaction shall 
be subject to tax in the month the payment was received
as if a tax inclusive sale of taxable property and services 
in the amount of the payment had been made. 
‘‘(d) PARTIAL PAYMENTS.—Partial payments shall 
be treated as pro rata payments of the underlying obliga-
tion and shall be allocated proportionately— 
‘‘(1) for fully taxable payments, between pay-
ment for the taxable property and service and tax, 
and 
‘‘(2) for partially taxable payments, among pay-
ment for the taxable property and service, tax and 
other payment. 
‘‘(e) RELATED PARTIES.—The credit provided by this 
section shall not be available with respect to sales made 
to related parties. For purposes of this section, related 
party means affiliated firms and family members (as de-
fined in section 302(b)). 
‘‘SEC. 206. INSURANCE PROCEEDS CREDIT. 
‘‘(a) IN GENERAL.—A person receiving a payment 
from an insurer by virtue of an insurance contract shall 
be entitled to a credit in an amount determined by sub-
section (b), less any amount paid to the insured by the 
insurer pursuant to subsection (c), if the entire premium 
(except that portion allocable to the investment account 
of the underlying policy) for the insurance contract giving 
rise to the insurer’s obligation to make a payment to the
insured was subject to the tax imposed by section 101 and 
said tax was paid. 
‘‘(b) CREDIT AMOUNT.—The amount of the credit 
shall be the product of— 
‘‘(1) the rate imposed by section 101, and 
‘‘(2) the quotient that is— 
‘‘(A) the amount of the payment made by 
the insurer to the insured, divided by 
‘‘(B) the quantity that is 1 minus the rate 
imposed by section 101. 
‘‘(c) ADMINISTRATIVE OPTION.—The credit deter-
mined in accordance with subsection (b) shall be paid by 
the insurer to the insured and the insurer shall be entitled 
to the credit in lieu of the insured, except that the insurer 
may elect, in a form prescribed by the Secretary, to not 
pay the credit and require the insured to make application 
for the credit. In the event of such election, the insurer 
shall provide to the Secretary and the insured the name 
and tax identification number of the insurer and of the 
insured and indicate the proper amount of the credit. 
‘‘(d) COORDINATION WITH RESPECT
TO EXEMP-
TION.—If taxable property or services purchased by an in-
surer on behalf of an insured are purchased free of tax 
by virtue of section 2(a)(8)(C), then the credit provided
by this section shall not be available with respect to that 
purchase. 
‘‘(e) INSURANCE CONTRACT.—For purposes of sub-
section (a), the term insurance contract’ shall include a 
life insurance contract, a health insurance contract, a 
property and casualty loss insurance contract, a general 
liability insurance contract, a marine insurance contract, 
a fire insurance contract, an accident insurance contract, 
a disability insurance contract, a long-term care insurance 
contract, and an insurance contract that provides a com-
bination of these types of insurance. 
‘‘SEC. 207. REFUNDS. 
‘‘(a) REGISTERED SELLERS.—If a registered seller 
files a monthly tax report with an overpayment, then, 
upon application by the registered seller in a form pre-
scribed by the sales tax administering authority, the over-
payment shown on the report shall be refunded to the reg-
istered seller within 60 days of receipt of said application. 
In the absence of such application, the overpayment may 
be carried forward, without interest, by the person entitled 
to the credit. 
‘‘(b) OTHER PERSONS.—If a person other than a reg-
istered seller has an overpayment for any month, then, 
upon application by the person in a form prescribed by 
the sales tax administering authority, the credit balance
due shall be refunded to the person within 60 days of re-
ceipt of said application. 
‘‘(c) INTEREST.—No interest shall be paid on any 
balance due from the sales tax administering authority 
under this subsection for any month if such balance due 
is paid within 60 days after the application for refund is 
received. Balances due not paid within 60 days after the 
application for refund is received shall bear interest from 
the date of application. Interest shall be paid at the Fed-
eral short-term rate (as defined in section 512). 
‘‘(d) SUSPENSION OF PERIOD TO PAY REFUND ONLY 
IF FEDERAL OR STATE COURT RULING.—The 60-day pe-
riods under subsections (a) and (b) shall be suspended 
with respect to a purported overpayment (or portion there-
of) only during any period that there is in effect a prelimi-
nary, temporary, or final ruling from a Federal or State 
court that there is reasonable cause to believe that such 
overpayment may not actually be due. 
‘‘CHAPTER 3—FAMILY CONSUMPTION 
ALLOWANCE 
‘‘Sec. 301. Family consumption allowance. 
‘‘Sec. 302. Qualified family. 
‘‘Sec. 303. Monthly poverty level. 
‘‘Sec. 304. Rebate mechanism. 
‘‘Sec. 305. Change in family circumstances.
‘‘SEC. 301. FAMILY CONSUMPTION ALLOWANCE. 
‘‘Each qualified family shall be eligible to receive a 
sales tax rebate each month. The sales tax rebate shall 
be in an amount equal to the product of— 
‘‘(1) the rate of tax imposed by section 101, 
and 
‘‘(2) the monthly poverty level. 
‘‘SEC. 302. QUALIFIED FAMILY. 
‘‘(a) GENERAL RULE.—For purposes of this chapter, 
the term ‘qualified family’ shall mean 1 or more family 
members sharing a common residence. All family members 
sharing a common residence shall be considered as part 
of 1 qualified family. 
‘‘(b) FAMILY SIZE DETERMINATION.— 
‘‘(1) IN GENERAL.—To determine the size of a 
qualified family for purposes of this chapter, family 
members shall mean— 
‘‘(A) an individual, 
‘‘(B) the individual’s spouse, 
‘‘(C) all lineal ancestors and descendants 
of said individual (and such individual’s 
spouse), 
‘‘(D) all legally adopted children of such 
individual (and such individual’s spouse), and 
‘‘(E) all children under legal guardianship 
of such individual (or such individual’s spouse).
‘‘(2) 
IDENTIFICATION
REQUIREMENTS.—In 
order for a person to be counted as a member of the 
family for purposes of determining the size of the 
qualified family, such person must— 
‘‘(A) have a bona fide Social Security num-
ber; and 
‘‘(B) be a lawful resident of the United 
States. 
‘‘(c) CHILDREN LIVING AWAY FROM HOME.— 
‘‘(1) STUDENTS LIVING AWAY FROM HOME.— 
Any person who was a registered student during not 
fewer than 5 months in a calendar year while living 
away from the common residence of a qualified fam-
ily but who receives over 50 percent of such person’s 
support during a calendar year from members of the 
qualified family shall be included as part of the fam-
ily unit whose members provided said support for 
purposes of this chapter. 
‘‘(2) CHILDREN OF DIVORCED OR SEPARATED 
PARENTS.—If a child’s parents are divorced or le-
gally separated, a child for purposes of this chapter 
shall be treated as part of the qualified family of the 
custodial parent. In cases of joint custody, the custo-
dial parent for purposes of this chapter shall be the 
parent that has custody of the child for more than
one-half of the time during a given calendar year. A 
parent entitled to be treated as the custodial parent 
pursuant to this paragraph may release this claim to 
the other parent if said release is in writing. 
‘‘(d) ANNUAL REGISTRATION.—In order to receive 
the family consumption allowance provided by section 301, 
a qualified family must register with the sales tax admin-
istering authority in a form prescribed by the Secretary. 
The annual registration form shall provide— 
‘‘(1) the name of each family member who 
shared the qualified family’s residence on the family 
determination date, 
‘‘(2) the Social Security number of each family 
member on the family determination date who 
shared the qualified family’s residence on the family 
determination date, 
‘‘(3) the family member or family members to 
whom the family consumption allowance should be 
paid, 
‘‘(4) a certification that all listed family mem-
bers are lawful residents of the United States, 
‘‘(5) a certification that all family members 
sharing the common residence are listed,
‘‘(6) a certification that no family members 
were incarcerated on the family determination date 
(within the meaning of subsection (l)), and 
‘‘(7) the address of the qualified family. 
Said registration shall be signed by all members of the 
qualified family that have attained the age of 21 years 
as of the date of filing. 
‘‘(e) REGISTRATION NOT MANDATORY.—Registration 
is not mandatory for any qualified family. 
‘‘(f) EFFECT
OF FAILURE
TO PROVIDE ANNUAL 
REGISTRATION.—Any qualified family that fails to reg-
ister in accordance with this section within 30 days of the 
family determination date, shall cease receiving the 
monthly family consumption allowance in the month be-
ginning 90 days after the family determination date. 
‘‘(g) EFFECT OF CURING FAILURE TO PROVIDE AN-
NUAL REGISTRATION.—Any qualified family that failed to 
timely make its annual registration in accordance with this 
section but subsequently cures its failure to register, shall 
be entitled to up to 6 months of lapsed sales tax rebate 
payments. No interest on lapsed payment amount shall be 
paid. 
‘‘(h) EFFECTIVE
DATE
OF
ANNUAL
REGISTRA-
TIONS.—Annual registrations shall take effect for the
month beginning 90 days after the family registration 
date. 
‘‘(i) EFFECTIVE
DATE
OF
REVISED
REGISTRA-
TIONS.—A revised registration made pursuant to section 
305 shall take effect for the first month beginning 60 days 
after the revised registration was filed. The existing reg-
istration shall remain in effect until the effective date of 
the revised registration. 
‘‘(j) DETERMINATION
OF
REGISTRATION
FILING 
DATE.—An annual or revised registration shall be deemed 
filed when— 
‘‘(1) deposited in the United States mail, post-
age prepaid, to the address of the sales tax admin-
istering authority; 
‘‘(2) delivered and accepted at the offices of the 
sales tax administering authority; or 
‘‘(3) provided to a designated commercial pri-
vate courier service for delivery within 2 days to the 
sales tax administering authority at the address of 
the sales tax administering authority. 
‘‘(k) PROPOSED REGISTRATION TO BE PROVIDED.— 
30 or more days before the family registration date, the 
sales tax administering authority shall mail to the address 
shown on the most recent rebate registration or change 
of address notice filed pursuant to section 305(d) a pro-
posed registration that may be simply signed by the appro-
priate family members if family circumstances have not 
changed. 
‘‘(l) INCARCERATED INDIVIDUALS.—An individual 
shall not be eligible under this chapter to be included as 
a member of any qualified family if that individual— 
‘‘(1) is incarcerated in a local, State, or Federal 
jail, prison, mental hospital, or other institution on 
the family determination date, and 
‘‘(2) is scheduled to be incarcerated for 6 
months or more in the 12-month period following 
the effective date of the annual registration or the 
revised registration of said qualified family. 
‘‘(m) FAMILY DETERMINATION DATE.—The family 
determination date is a date assigned to each family by 
the Secretary for purposes of determining qualified family 
size and other information necessary for the administra-
tion of this chapter. The Secretary shall promulgate regu-
lations regarding the issuance of family determination 
dates. In the absence of any regulations, the family deter-
mination date for all families shall be October 1. The Sec-
retary may assign family determination dates for adminis-
trative convenience. Permissible means of assigning family 
determination dates include a method based on the 
birthdates of family members.