Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
130.0050 Assignment of Accounts Receivable. A taxpayer assigns its accounts receivable to a related corporation at a 3 percent discount. There is no recourse against the taxpayer by the related corporation for uncollectibles beyond the 3 percent discount. The taxpayer cannot deduct the 3 percent as a bad debt. The selling of the accounts receivable is equivalent to a financing operation secured by the receivable. The discount is the equivalent of interest paid on a loan. 2/3/94.