Credit sales and bad debts

Official textlegis.nd.govlast amended Apr 01, 2006

Conditional sales contracts or other forms of sales, if the payment of the principal sum is to be extended over a period longer than sixty days from the date of the sale, do not include credit sales for which the purchaser is billed in full in intervals of less than sixty consecutive days even though the credit terms may allow the purchaser to extend the principal payments beyond sixty consecutive days. When a retailer sells or renegotiates a conditional sales contract or other form of credit for which the principal payment is to be extended over a period longer than sixty days to a third party, the retailer is required to remit the full amount of tax due on the outstanding credit balance. Bad debts may be deducted from gross receipts when the tangible personal property is sold on credit and the following facts are fully shown:

# 1.

That the account has not been paid and has been found to be worthless.

# 2.

That the amount was previously included in the gross receipts and sales tax collected and remitted by the retailer.

# 3.

That the bad debt is written off as uncollectible in the retailer's books. When filing responsibilities have been assumed by a certified service provider, the certified service provider may claim, on behalf of the retailer, any bad debt provided by this section. The certified service provider must credit or refund the full amount of any bad debt allowance or refund received on behalf of the retailer. The books and records of the party claiming the bad debt must contain the customers' names, addresses, amount charged off, and the period in which the sale was included in the holder's taxable sales, and be available for review by the tax commissioner upon request.

Amendment history

History: Effective June 1, 1984; amended effective July 1, 1989; April 1, 2006. General Authority: NDCC 57-39.2-19 Law Implemented: NDCC 57-39.2-01, 57-39.2-02.1, 57-39.2-03.2, 57-39.2-05, 57-39.2-10, 57-39.2-11, 57-39.4-21

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