HB 1182 Summary

• Amends Indiana Code IC 6-2.5-6-9 to add reference to section 9.5 regarding bad debt deductions for private label credit cards, effective January 1, 2016 (retroactive).

• Creates new section 9.5 establishing conditions for retail merchants to claim deductions or refunds on unpaid private label credit card balances charged off as bad debt by lenders after December 31, 2014.

• Allows retail merchants to deduct the full unpaid balance outstanding in accounts or receivables at the time of charge-off, regardless of the date the original credit sale transaction occurred.

• Permits retail merchants who remit sales tax to multiple states to use apportionment methods based on Indiana vs. outside sales, taxable vs. nontaxable sales, and tax remitted to Indiana, or alternatively use a sampling methodology agreed upon with the department.

• Requires retail merchants to maintain adequate books and records supporting the charge-off of accounts, and specifies that collected amounts on previously deducted receivables must be included in gross retail income for the reporting period in which collection occurs.