64:06:01:03.02.  Collection of a previously deducted bad debt or bad check. If a previously deducted bad debt is collected or a check that was returned because of nonsufficient funds (NSF) or no account and not included as part of gross receipts is collected, the tax on the amount collected must be paid and reported on the return filed for the period in which the collection is made. For the purposes of reporting a payment received on a previously claimed bad debt, any payments made on such debt or account are applied first proportionally to the taxable price of the property or service and the sales tax thereon, and secondly to interest, service charges, and any other charges. No deductions for collection expenses are permitted. If a bad debt is sold to a collection agency, only the amount received may be included on the next sales tax return.

          Source: 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995; 31 SDR 214, effective July 6, 2005.

          General Authority: SDCL 10-45-47.1(2).

          Law Implemented: SDCL 10-45-30.