Florida Administrative Code › 12 - DEPARTMENT OF REVENUE › 12A - Sales and Use Tax › Chapter 12A-1 - SALES AND USE TAX › Section 12A-1.012 - Repossessed Merchandise and Bad Debts

Current through Reg. 50, No. 138; July 16, 2024
(1)
				Repossessions:
(a) The repossession of
				tangible personal property by the seller or the lienholder is not subject to
				tax.
(b) The redemption of
				repossessed tangible personal property by the debtor prior to the sale of the
				repossessed property is not subject to tax.
(c) The subsequent sale of repossessed
				tangible personal property is subject to tax.
(d) A dealer who collected and remitted sales
				tax to the Department on the selling price of tangible personal property sold
				under a retail installment, title loan, retain title, conditional sale, or
				similar contract in which the dealer retains a security interest in the
				property may, upon repossession of the property, take credit on a subsequent
				tax return for, or obtain a refund of, that portion of the tax that is
				applicable to the unpaid balance of the contract. The credit or refund is based
				on the ratio that the total tax bears to the unpaid balance of the sales price,
				excluding finance or other nontaxable charges. A credit or refund must be
				claimed within 12 months following the month in which the property was
				repossessed.
(e) When a dealer
				claims a tax credit or a refund of tax paid on tangible personal property sold
				and repossessed, the dealer must complete a Schedule of Tax Credits Claimed on
				Repossessed Tangible Personal Property (Form DR-95B, incorporated by reference
				in Rule 12A-1.097, F.A.C.).
(f) The dealer may claim a tax credit or
				refund on tangible personal property, including any aircraft, boat, mobile
				home, motor vehicle, or any other titled property sold by the dealer for which
				the dealer holds a security interest in the property under the terms of a
				retail installment, title loan, retain title, conditional sale, or similar
				contract when:
1. The dealer sold the property
				and remitted Florida sales tax to the Department;
2. The dealer financed the property, or the
				property was financed by a financing institution with recourse;
3. The property was subsequently repossessed
				upon default of the terms of the contract by the purchaser of the property;
				and,
4. The dealer acquired
				ownership of the repossessed property (e.g., certificate of title or other
				evidence establishing possession and ownership of the repossessed
				property).
(g) When
				claiming a tax credit or refund, the dealer must complete a Schedule of Tax
				Credits Claimed on Repossessed Tangible Personal Property (Form DR-95B,
				incorporated by reference in Rule
				12A-1.097, F.A.C.). When
				claiming a tax credit, the completed Form DR-95B must be retained with the
				dealer's applicable sales and use tax return. When claiming a tax refund, a
				Sales and Use Tax Application for Refund (Form DR-26S, incorporated by
				reference in Rule 12-26.008, F.A.C.), the
				completed Form DR-95B, and the information and documentation required to be
				included with Form DR-26S must be filed with the Department.
(h) Dealers must retain documentation
				required to establish the right to a credit or refund, including the retail
				installment, title loan, retain title, conditional sale, or similar contract,
				and documents establishing ownership or title to the property after
				repossession. The records required in this subsection must be maintained by the
				dealer until tax imposed by Chapter 212, F.S., may no longer be determined and
				assessed under Section
				95.091(3),
				F.S., and must be made available to the Department upon
				request.