Louisiana Administrative Code › Title 61 - REVENUE AND TAXATION › Part I - Taxes Collected and Administered by the Secretary of Revenue › Chapter 43 - Sales and Use Tax › Section I-4369 - Sales Returned to Dealer ; Credit or Refund of Tax

Current through Register Vol. 50, No. 6, June 20, 2024
A.R.S.
				47:315(A) and
				47:337.34(A) provide
				special rules for the handling of taxes which have been charged to the account
				of a purchaser, consumer, or user in cases where the property sold has been
				returned to the dealer or where a refund is made of the charges for services
				upon which a tax was based. In either case, if the tax has been collected or
				charged to the account of the purchaser or consumer or user and has not yet
				been remitted to the collector, and a refund or credit is made to the purchaser
				or consumer, the dealer may delete the sale and the tax due in submitting his
				return for the current tax period. If the merchandise is returned to the dealer
				or if a refund is made to the customer for any charges for services after the
				tax collected or charged to the customer's account has been remitted to the
				collector, the dealer may file an amended sales tax return for the period in
				which the tax so refunded was originally remitted. The blank return form must
				be obtained from the appropriate taxing authority to ensure that it bears the
				correct taxpayer identification and account information and the proper marking
				of an "amended" return. The dealer must complete the amended return by
				reporting sales and deductions after making the proper adjustments to reflect
				the rescinded sale or sales. The credit balance which will result from the
				computation of total tax, penalty, and interest will be refunded to the dealer
				in the same manner as a credit return which is timely filed in accordance with
				§4351
B.R.S.
				47:315(B) and
				R.S.
				47:337.34(B) provide a dealer
				with a method for claiming refunds for the recovery of taxes which have been
				remitted to the collector, but are later written off as uncollectible accounts
				from credit customers. Dealers submitting refund claims should be aware of the
				following restrictions specifically provided in or authorized by
				R.S.
				47:315(B) and
				47:337.34(B).
1. The state sales or use tax is refundable
				on debts incurred after January 1, 1976, that ultimately become worthless. The
				tax will not be refunded on worthless debts incurred prior to January 1, 1976.
				The local sales or use tax is refundable on debts incurred after September 3,
				1989, which ultimately become worthless. The tax will not be refunded on
				worthless debts incurred prior to September 3, 1989.
2. Before the collector can issue a sales tax
				refund on a bad debt, the debt must actually have been deducted on a federal
				income tax return in accordance with Section 166 of the United States Internal
				Revenue Code. Since the issuance of refunds is tied to charge-offs on the
				annual federal return, the collector will process one refund per year for each
				dealer.
3. If after a debt is
				charged off as worthless and a sales tax refund issued, all or some portion of
				the debt is collected, the gross amount collected shall be reported as a new
				sale for the period when the recovery is made.
4. The local credit or refund shall be
				granted whenever the Louisiana Department of Revenue has found the dealer to be
				entitled to reimbursement in accordance with
				R.S.
				47:337.34(B)(1).
5. The sales tax is refundable only on those
				bad debts that are the result of credit or deferred payment sales of tangible
				personal property and sales of services financed by the dealer making the sale.
				No refund is authorized on bad debts arising from leases or rentals, even
				though tax may have been charged on such transactions, or on sales financed by
				lending institutions or independent credit card plans, unless the lender has
				full recourse against the seller for any unpaid amounts. The sales tax is
				refundable on bad debts which arise because of the issuance of worthless checks
				only to the extent the check was in payment of taxable tangible personal
				property.
6. No refund will be
				issued in the case where a dealer has repossessed saleable merchandise and
				cancelled the customer's credit obligation.
7. Dealers may recover sales tax remitted on
				bad debts solely through the issuance of refunds by the collector. Dealers must
				continue to file sales tax returns reporting their total sales of merchandise
				during each taxable period, regardless of whether customer obligations have
				been collected. Deductions for bad debt losses may not be taken on sales tax
				returns.