The Supreme Judicial Court denied a retailer's claim of a bad debt sales tax credit for sales made to customers that were eventually charged off as worthless debt. Me. Rev. Stat. Ann. 36 § 1811-A allows for a credit for the taxes paid on sales accounts charged off as worthless. However, the retailer had a financing agreement with a third-party creditor that applied when customers made purchases using a payment plan. Under the agreement, the retailer received full payment for the goods, including sales tax, and the third-party creditor assumed the right to collect payment, including sales tax and interest, for the goods purchased. The third party creditor took the risk of a lack of payment, not the retailer. Based on the plain reading of the statute, the retailer did not qualify for the bad debt sales tax credit because the third-party creditor wrote off the debt and the retailer was fully compensated for the purchases. Sears, Roebuck & Co. v. State Tax Assessor, Me. Sup. Jud. Ct., Dkt. No. BCD-11-597 (Aug. 28, 2012).
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