SB 490

Under current law, for sales tax purposes, a seller may claim on a sales tax

return a deduction for the amount of any bad debt that the seller writes off as

uncollectible in the seller's books and records, if the amount may be deducted as bad

debt for federal income tax purposes, regardless of whether the seller must file a

federal income tax return.

Under this bill, a lender who extends credit through a private label credit card,

dual purpose credit card, or dealer credit program, may enter into an agreement with

a seller so that the seller, the lender, or the lender's affiliate may claim a deduction

or a refund for bad debt. A private label credit card is any credit card that identifies

a seller's name or logo on the card and that may be used only for purchases from that

seller or from any of the seller's affiliates or franchisees. A dual purpose credit card

is a credit card that may be used as a private label credit card or to make purchases

from persons other than the seller whose name or logo appears on the card. A dealer

credit program is an arrangement for extending credit for a specific purchase from

a seller.