(a) The commissioner is empowered and directed to refund the amount of any eligible bad debt credit incurred by a manufacturing distributor or wholesale dealer and jobber of tobacco products. No amount shall be refunded unless the debt has been found to be worthless and actually charged off for federal income tax purposes. If the taxpayer receives a refund pursuant to this section arising from any bad debt so charged off that is thereafter in whole or in part paid to the manufacturing distributor or wholesale dealer and jobber, the amount so paid shall be included in the first return filed after the collection and the tax paid accordingly.

Terms Used In Tennessee Code 67-4-1030

  • Commissioner: means the commissioner of revenue. See Tennessee Code 67-4-1001
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Manufacturing distributor: means any person, with a plant located in this state, engaged in the business of manufacturing or processing consumable tobacco products, taxed by this part. See Tennessee Code 67-4-1001
  • Person: means and includes every individual, firm, association, joint-stock company, syndicate and corporation. See Tennessee Code 67-4-1001
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Sale: means , in addition to its usual meaning, any sale, use, transfer, exchange, barter, gift, or offer for sale and distribution, in any manner or by any means whatsoever. See Tennessee Code 67-4-1001
  • taxpayer: means every corporation, subchapter S corporation, limited liability company, professional limited liability company, registered limited liability partnership, professional registered limited liability partnership, limited partnership, cooperative, joint-stock association, business trust, regulated investment company, REIT, state-chartered or national bank, or state-chartered or federally chartered savings and loan association. See Tennessee Code 67-4-2004
  • Wholesale dealer and jobber: means any person who maintains wholesale facilities in one (1) or more permanent locations, and engages in the business of receiving, storing, purchasing, selling at wholesale only, importing unstamped tobacco products, and otherwise handling tobacco products for resale at a wholesale price only to other licensed wholesale dealers and jobbers, or tobacco distributors or retail dealers as defined in this section, but does not sell tobacco products directly to the ultimate consumer. See Tennessee Code 67-4-1001
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) For purposes of this section, “eligible bad debt credit” means the taxes attributable to any portion of a debt arising from a sale of tobacco products subject to tax under this part that is not otherwise deductible or excludable, that has become worthless or uncollectible, and that has been actually charged off for federal income tax purposes. A bad debt shall not include any interest on the wholesale price of a tobacco product, uncollectible amounts of property that remain in the possession of the manufacturing distributor or the wholesale dealer and jobber until the full purchase price is paid, expenses incurred in attempting to collect any account receivable or any portion of the debt recovered, accounts receivable that have been sold to a third party, or repossessed property.
(c) Any claim for an eligible bad debt credit under this section shall be submitted as a claim for refund supported by the following:

(1) A copy of the original invoice;
(2) Evidence that the tobacco products described in the invoice were delivered to the person who ordered them;
(3) Evidence that the person who ordered and received the tobacco products did not pay the manufacturing distributor or the wholesale dealer and jobber for the tobacco products and that the manufacturing distributor or the wholesale dealer and jobber used reasonable collection practices in attempting to collect the debt; and
(4) Evidence that the debt was written off for federal tax purposes.
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