Section 320 Clause Samples

Section 320. UNIFORM RULES FOR RECOVERY OF BAD DEBTS 17 A. Allow a deduction from taxable sales for bad debts. Any deduction taken that is 18 attributed to bad debts shall not include interest. 19 B. Utilize the federal definition of “bad debt” in 26 U.S.C. Sec. 166 as the basis for 20 calculating bad debt recovery. However, the amount calculated pursuant to 26 U.S.C. 21 Sec. 166 shall be adjusted to exclude: financing charges or interest; sales or use taxes 22 charged on the purchase price; uncollectable amounts on property that remain in the 23 possession of the seller until the full purchase price is paid; expenses incurred in 24 attempting to collect any debt, and repossessed property. 25 C. Allow bad debts to be deducted on the return for the period during which the bad debt is 26 written off as uncollectable in the claimant’s books and records and is eligible to be 27 deducted for federal income tax purposes. For purposes of this subsection, a claimant 28 who is not required to file federal income tax returns may deduct a bad debt on a return 29 filed for the period in which the bad debt is written off as uncollectable in the claimant’s 30 books and records and would be eligible for a bad debt deduction for federal income tax 31 purposes if the claimant was required to file a federal income tax return. 1 D. Require that, if a deduction is taken for a bad debt and the debt is subsequently collected 2 in whole or in part, the tax on the amount so collected must be paid and reported on the 3 return filed for the period in which the collection is made. 4 E. Provide that, when the amount of bad debt exceeds the amount of taxable sales for the 5 period during which the bad debt is written off, a refund claim may be filed within the 6 member state’s otherwise applicable statute of limitations for refund claims; however, 7 the statute of limitations shall be measured from the due date of the return on which the 8 bad debt could first be claimed. 9 F. Where filing responsibilities have been assumed by a CSP, allow the service provider to 10 claim, on behalf of the seller, any bad debt allowance provided by this section. The CSP 11 must credit or refund the full amount of any bad debt allowance or refund received to the 12 seller. 13 G. Provide that, for the purposes of reporting a payment received on a previously claimed 14 bad debt, any payments made on a debt or account are applied first proportionally to the 15 taxable price of the property or service and the sales tax...

Section 320. Excess Wear and Use; Excess Mileage.