Michigan – State’s Supreme Court Denies Review of Bad Debt Decision

SALT Report 1855 – Following recent court decisions in Arizona and Kentucky, the Michigan Supreme Court has denied a Taxpayer’s request to review a Court of Appeals decision regarding bad debt deductions.

The Michigan Court of Appeals ruled that a retailer who offered private label credit cards (PLCC) was not entitled to a bad-debt deduction for sales tax remitted to the Department on purchases made by PLCC holders who later defaulted on their credit card payments. The Taxpayer requested a refund despite having been compensated for the purchases and the tax by the finance companies who issued the PLCC’s.

The Supreme Court denied the Taxpayer’s request for review stating that they were, “not persuaded that the question presented should be reviewed by this Court.”

For Further Information:

Michigan Supreme Court – Docket Number 145412

SALT Report 1815 – Bad Debt Deductions on Arizona Transaction Privilege Tax Returns

SALT Report 1822 – Kentucky Retailer Not Entitled to Bad Debt Deduction