Sales/Use/Indirect:
Illinois DOR Proposes Rule Addressing Bad Debt Deductions on Installment Contracts for Cash Basis Retailers
Proposed Amended 86 Ill. Adm. Code 130.1960, Ill. Dept. of Rev. (10/20/23). Pursuant to state caselaw from 2021 that permitted bad debt refund claims for a cash basis taxpayer making installment sales [see State Tax Matters, Issue 2021-46, for additional details on this case], the Illinois Department of Revenue is proposing amendments to an Illinois retailers’ occupation tax rule to clarify that a cash basis retailer that cannot claim a bad debt deduction on its federal income tax return is entitled to claim a refund for Illinois sales tax paid by the retailer on that portion of an installment contract found to be worthless or uncollectable. The proposed amendment provides new guidance on the calculation of a bad debt, including examples, as well as additional direction regarding procedural requirements and recordkeeping. Comments on this proposal are due no later than 45 days after its October 20, 2023 publication. 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.
