Sales/Use/Indirect:
Ohio: New Law Permits Bad Debt Deductions for Certain Private Label Credit Card Transactions
H.B. 223, signed by gov. 12/22/22. New law expands Ohio’s current sales tax “bad debt” deduction by allowing vendors to deduct bad debts on certain third-party accounts affiliated with the vendor even though the debt is charged off on the books of the third-party and not the vendor – specifically by allowing vendors to take a deduction for bad debts on “private label credit accounts” used to make purchases from the vendor or the vendor’s affiliates, even though the debt is charged off as uncollectible on the books of the owner of the credit account (i.e., the “lender”) and not on the vendor’s books. Under the new law, a “private label credit account” means a credit account that carries, refers to, or is branded with the name of a vendor and for which the lender, when establishing the consumer’s credit limit, complied with all applicable Ohio and federal laws that are intended to protect consumers. For a vendor to qualify for this expanded deduction, the private label credit account debt must be deductible by the lender for federal income tax purposes, and the lender must charge off the debt as uncollectible on or after July 1, 2023. Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
