SF 3400

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxes; sales and use tax; allowing a 
  1.3             refund of sales tax related to bad debt losses of 
  1.4             lender; changing the dates for filing a deduction or 
  1.5             refund claim on bad debt loss; amending Minnesota 
  1.6             Statutes 2000, sections 289A.40, subdivision 2; 
  1.7             289A.50, by adding a subdivision; 297A.81. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 289A.40, 
  1.10  subdivision 2, is amended to read: 
  1.11     Subd. 2.  [BAD DEBT LOSS.] (a) If a claim relates to an 
  1.12  overpayment because of a failure to deduct or file a refund 
  1.13  claim for a loss due to a bad debt or to a security becoming 
  1.14  worthless, the claim is considered timely if filed within seven 
  1.15  years from the earlier of (1) the date prescribed for the filing 
  1.16  of the return, or (2) the date of the debt becoming worthless.  
  1.17     (b) A claim relating to an overpayment of taxes under 
  1.18  chapter 297A or 297B resulting from a bad debt loss must be 
  1.19  filed within 3-1/2 years from the date prescribed for filing the 
  1.20  return, plus any extensions granted for filing the return, but 
  1.21  only if filed within the extended time, or within one year from 
  1.22  the date the taxpayer's federal income tax return is timely 
  1.23  filed claiming the bad debt deduction, whichever period expires 
  1.24  later 12 months following the month in which the bad debt has 
  1.25  been charged off for federal income tax purposes.  For purposes 
  1.26  of this paragraph, "charged off for federal income tax purposes" 
  2.1   means the charging off of unpaid balances due on accounts as 
  2.2   uncollectible, or declaring as uncollectible such unpaid balance 
  2.3   due on accounts in the case of a person who is not required to 
  2.4   file federal income tax returns.  The claim for deduction or 
  2.5   refund may be filed by any person listed as eligible to claim a 
  2.6   refund under section 297A.81.  The refund or credit is limited 
  2.7   to the amount of overpayment attributable to the loss.  A person 
  2.8   may obtain a refund of tax on any amount of bad debt that 
  2.9   exceeds the amount of taxable sales within a 12-month period 
  2.10  defined by the date of the bad debt.  If a deduction is taken or 
  2.11  a refund claimed for a bad debt and the person subsequently 
  2.12  collects the debt in whole or in part, the tax on the amount 
  2.13  collected must be paid and reported on the return filed for the 
  2.14  period in which the collection is made; or if no return is 
  2.15  required to be filed, the person shall pay the tax directly to 
  2.16  the commissioner on the taxable portion of the amount collected. 
  2.17     [EFFECTIVE DATE.] This section is effective for claims 
  2.18  filed after July 1, 2003. 
  2.19     Sec. 2.  Minnesota Statutes 2000, section 289A.50, is 
  2.20  amended by adding a subdivision to read: 
  2.21     Subd. 2b.  [SALES TAX DEDUCTION OR REFUND TO A CERTIFIED 
  2.22  SERVICE PROVIDER.] If a certified service provider, as defined 
  2.23  in section 297A.995, subdivision 2, paragraph (c), claims a 
  2.24  refund or deduction on behalf of a client, it must credit or 
  2.25  refund to the client the full amount of any deduction or refund 
  2.26  received. 
  2.27     [EFFECTIVE DATE.] This section is effective for claims 
  2.28  filed after July 1, 2003. 
  2.29     Sec. 3.  Minnesota Statutes 2000, section 297A.81, is 
  2.30  amended to read: 
  2.31     297A.81 [UNCOLLECTIBLE DEBTS; OFFSET AGAINST OTHER TAXES; 
  2.32  REFUNDS.] 
  2.33     The taxpayer (a) A person meeting the qualifications in 
  2.34  paragraph (b) may offset against the taxes payable for any 
  2.35  reporting period or file a claim for a refund for the amount of 
  2.36  taxes imposed by this chapter previously paid as a result of any 
  3.1   transaction the consideration for which became a debt owed to 
  3.2   the taxpayer person that became uncollectible during the 
  3.3   reporting period, but only in proportion to the portion of the 
  3.4   debt that became uncollectible.  Section 289A.40, subdivision 2, 
  3.5   applies to an offset or refund under this section. 
  3.6      (b) In order to qualify for an offset or refund under this 
  3.7   section, a person must be one of the following: 
  3.8      (1) the taxpayer who collected and remitted the tax; 
  3.9      (2) a lender; or 
  3.10     (3) a certified service provider, as defined in section 
  3.11  297A.995, subdivision 2, paragraph (c), making a claim on behalf 
  3.12  of a taxpayer or a lender. 
  3.13     (c) For purposes of this section, "lender" means the 
  3.14  following: 
  3.15     (1) any person who holds a retail account which that person 
  3.16  purchased directly from a taxpayer who reported the tax; 
  3.17     (2) any person who holds a retail account pursuant to that 
  3.18  person's contract directly with the taxpayer who reported the 
  3.19  tax; or 
  3.20     (3) any person who is either a member of a group of 
  3.21  controlled corporations under United States Code, title 26, 
  3.22  section 1563, of a person described in clause (1) or (2), or an 
  3.23  assignee of a person described in clause (1) or (2). 
  3.24     [EFFECTIVE DATE.] This section is effective for all claims 
  3.25  filed after July 1, 2003.