IN HB1468

Amends Indiana Code sections 6-2.5-6-9 and 6-2.5-6-9.5 to establish a sales and use tax deduction for bad debt written off by retail merchants, effective retroactively to January 1, 2015.

Allows retail merchants to deduct uncollectible receivables from gross retail income if the debt was written off as uncollectible under federal tax law (Internal Revenue Code Section 166), but excludes interest, financing charges, sales taxes, and collection expenses.

Establishes a new section 9.5 specifically for private label credit card bad debt, allowing retailers to claim deductions or refunds on unpaid balances charged off after December 31, 2014, regardless of when the original transaction occurred.

Permits retailers remitting sales tax to multiple states to use apportionment methods to calculate the portion of Indiana tax included in bad debts, either through calculation based on sales ratios or through department-approved sampling methodology.

Requires retailers to maintain adequate documentation supporting the charge-off of accounts and specifies that any subsequently collected amounts must be reported as gross retail income in the period of collection.