The Supreme Court of Washington reversed the earlier ruling of the Appellate Court by affirming that now the retailers are entitled to claim refunds of the bad debts on default Private Label Credit Card Payment (PLCCP).
Prior to this order passed by the Supreme Court of Washington, the ruling of the appellate court was that the retailer is not entitled to Washington’s bad debt sales tax refund in the case where retailer has entered into a contract with a bank financial company in order to provide Private Label Credit Card Payment (PLCCP) to the consumers.
The earlier ruling was based on the rationale that such bad debts are not at all directly attributable for a purpose of retail sales as per the ruling of the case law in 2009, moreover, it was not mentioned in writing in the retailer’s books of accounts and records.
Presently the Supreme Court of Washington reversed the earlier ruling by stating that in spite of the fact that the banks are generally involved in the credit transactions such as banks act as the facilitators of Credit sales, however, the retailer is still the sufferer wherein he is not paid by his customer which may include the customer’s non-payment of the sales tax. Further, the court elaborated on the meaning and affirmed that vai its separate guarantor arrangements with the respective banks, which facilitate the credit transaction, all the losses which were incurred because of the non-payment of the sales tax by the defaulting customer can be reimbursed by the retailer to the bank.
The Supreme Court also held that as per the Revenue Code of Washington the are empowered to claim a deduction for all the bad debts.
