SCS CSHB 239(TRA): "An Act relating to the liability of motor fuel dealers for payment of tax imposed on certain credit transactions involving motor fuel sales or transfers that become worthless debts or on sales or transfers to persons who declare bankruptcy; and providing for an effective date."
00SENATE CS FOR CS FOR HOUSE BILL NO. 239(TRA) 01 "An Act relating to the liability of motor fuel dealers for payment of tax 02 imposed on certain credit transactions involving motor fuel sales or transfers that 03 become worthless debts or on sales or transfers to persons who declare 04 bankruptcy; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 43.40 is amended by adding a new section to read: 07 Sec. 43.40.025. Handling of tax in sales or transfers of motor fuel in 08 certain credit transactions. (a) This section applies when a dealer who sells or 09 otherwise transfers motor fuel in one or more credit transactions in the state 10 subsequently determines that the person to whom the motor fuel was sold or 11 transferred in the credit transaction 12 (1) has become a debtor under 11 U.S.C. (Federal Bankruptcy Act); or 13 (2) has ceased to pay the person's debts in the ordinary course of 14 business or cannot pay the person's debts as they become due, and the dealer treats the
01 person's debt as a worthless debt or partially worthless debt under 26 U.S.C. 166. 02 (b) A dealer is entitled to a credit in an amount equal to the tax remitted to 03 the department for the tax due on sales or transfers of motor fuel in circumstances 04 described in (a) of this section if 05 (1) under this chapter, the sales or transfers result in a tax liability in 06 the aggregate of $500 or more; and 07 (2) the dealer has submitted a statement and remitted the tax due on the 08 transactions under AS 43.40.010(c). 09 (c) The dealer may not claim or obtain a refund of the amount of a credit to 10 which the dealer is entitled under (b) of this section. The dealer may apply the credit 11 authorized by (b) of this section against the motor fuel tax payable under this chapter 12 by the dealer to the state 13 (1) during the month in which the dealer provides written notification 14 to the department of the claim of the credit accompanied by a copy of the bankruptcy 15 petition filed by the person to whom the motor fuel was sold or transferred; or 16 (2) in the first month after the dealer reports to the Internal Revenue 17 Service that the debt of the person to whom the motor fuel was sold or transferred is 18 a worthless debt or partially worthless debt by claiming the debt as a deduction under 19 26 U.S.C. 166. 20 (d) If, as to a credit transaction described in (a) of this section for which a 21 credit was claimed and allowed under (b) and (c) of this section, the person to whom 22 the motor fuel was sold or transferred later makes payment to the dealer of 23 (1) all of the debt due on the transactions, the dealer shall remit 24 payment to the department of the tax as required by AS 43.40.010; 25 (2) a portion of the debt due on the transactions, the dealer shall remit 26 payment to the department of a proportional part of the tax as required by 27 AS 43.40.010. 28 (e) The commissioner may not allow a dealer a credit under this section for 29 the credit transaction debt of a person if the dealer claiming the credit has, within the 30 five-year period immediately before making the claim of the credit, previously 31 submitted a statement under (c)(2) of this section that a credit transaction debt of that
01 person is a worthless debt or partially worthless debt under (c)(2) of this section. 02 (f) This section does not apply to a credit transaction by a dealer who sells or 03 otherwise transfers motor fuel in a credit transaction after the dealer knows that the 04 person to whom the motor fuel was sold in the credit transaction has become a debtor 05 under 11 U.S.C. (Federal Bankruptcy Act). 06 (g) In this section, "credit transaction" means a transaction by which the 07 payment for motor fuel subject to the tax levied under this chapter is to be made at a 08 future date. 09 * Sec. 2. APPLICABILITY. (a) This Act applies to sales or transfers of motor fuel 10 subject to tax under AS 43.40.010 - 43.40.100 that are made on or after the effective date of 11 this Act. 12 (b) In AS 43.40.025(e), added by sec. 1 of this Act, reference to a previously 13 submitted credit transaction debt means a credit transaction debt that was reported to the 14 Internal Revenue Service as a deduction against income under 26 U.S.C. 166 on or after the 15 effective date of this Act because the credit transaction debt became worthless or partially 16 worthless. 17 * Sec. 3. AS 43.40.025, enacted by sec. 1 of this Act, is repealed July 1, 2003. 18 * Sec. 4. This Act takes effect July 1, 1998.