Texas Tax Code

§ 151.426 — CREDITS AND REFUNDS FOR BAD DEBTS, RETURNED MERCHANDISE, AND REPOSSESSIONS

TX § 151.426Title 2. STATE TAXATION · Part E. SALES, EXCISE, AND USE TAXES · Ch. 151. LIMITED SALES, EXCISE, AND USE TAX · Art. I. REPORTS, PAYMENTS, AND METHODS OF REPORTING

Statute text

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(a)A seller may withhold the payment of the tax on a portion of the sales price of a taxable item that remains unpaid by the purchaser if:

(1)during the reporting period in which the item was sold, leased, or rented the seller determines that the unpaid portion will remain unpaid;

(2)the seller enters the unpaid portion of the sales price in the seller's books as a bad debt; and

(3)the bad debt is claimed as a deduction for federal tax purposes during the same or a subsequent reporting period.

(b)If the portion of a debt determined to be bad under Subsection (a) of this section is paid, the seller shall report and pay the tax on the portion during the reporting period in which the payment is made.

(c)Subject to Subsection (e), a retailer or any person who extends credit to a purchaser under a retailer's private label credit agreement, or an assignee or affiliate of either, is entitled to credit or reimbursement for taxes paid on the portion of:

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Legislative history

Acts 1981, 67th Leg., p. 1575, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 1043, ch. 235, art. 7, Sec. 6, eff. Sept. 1, 1983; Acts 1999, 76th Leg., ch. 1467, Sec. 2.24, eff. Oct. 1, 1999.