Sec. 1. 36 MRSA §1811-A, as amended by PL 1981, c. 706, §22, is repealed and the following enacted in its place:

§1811-A.__Credit for worthless accounts

1.__General.__The tax paid on a sale represented by an account charged off as worthless may be credited against the tax due on a subsequent report filed within 3 years of the charge-off, but, if the account is thereafter collected by the retailer, a tax must be paid upon the amount so collected.

2.__Automobile retailer and related finance company.__An automobile retailer is eligible for the credit provided in subsection 1 if the account was assigned by the retailer to a related finance company and was charged off as worthless by the related finance company.__For purposes of this subsection, a "related finance company" is an entity that provides financing primarily to customers of a single automobile retailer.

Sec. 2. Retroactivity. This Act applies retroactively to all unpaid tax assessments issued on or after October 1, 2002 to which an appeal has been or can be taken. This Act may not form the basis for any tax refund claims.

SUMMARY

This bill allows an automobile retailer to claim the worthless account sales tax credit when the account is charged off by a company that provides financing primarily to customers of that automobile retailer. This bill allows an automobile retailer who has not paid an assessment issued on or after October 1, 2002 for sales tax due on a worthless account to obtain a credit for the sales tax paid on that worthless account.