Ohio Expands Bad Debts to Include Tax Paid on Purchases made with Private Label Credit Cards

In line with current recommendations from the Counsel on State Taxation, the state of Ohio has updated its laws regarding bad debt deductions on sales tax returns to allow states to take a credit for tax remitted for a transaction made with a private label credit card that is in default. The resulting deduction keeps businesses from paying sales tax out of pocket on a transaction where they and their private label credit issuer did not receive the sales tax from the customer. Prior state law allowed bad debt deductions for transactions where store credit cards were used, but COST’s recommendation asks states to expand this to private label credit cards, as they now make up the majority of store cards.

(Ohio H.B. 223, December 2023)

Posted on January 4, 2023