Tenn. Comp. R. & Regs. 1320-04-05-.44 - REPOSSESSIONS

(1) Except as otherwise provided in this rule, a wholesaler or retailer may not deduct the unpaid amounts on repossessed tangible personal property from their gross proceeds of sales in submitting their reports.

(2) In cases where a wholesaler or retailer sells any article of personal property on a security agreement, or any other instrument whereby he retains title to the property, and he repossesses or enforces his lien against the said property and there is an unpaid principal balance of more than five hundred dollars ($500) the dealer may deduct, in reporting his gross receipts, an amount equal to the unpaid balance minus five hundred dollars ($500). The unpaid balance to be considered in this calculation is only that amount which constitutes principal, and shall not include interest, carrying charges or any similar charges. Any wholesaler or retailer claiming such a deduction or deductions shall preserve, as a part of the official records of his business, full information concerning the sale and subsequent repossession of the subject item of personal property; and such information shall include identification of parties and items involved, the dates of the sale and repossession, the amount of the original price to the purchaser upon which the Business Tax was due to be paid, and the amount of unpaid balance which forms the basis for the deduction.

(3) A bank or other financial institution purchasing contracts without recourse from wholesalers or retailers relating to tangible personal property which was sold by the latter under a security agreement or other title-retained instrument may not claim any deduction or credit for any unpaid balances remaining due on any such contracts following repossessing of the property or any other action to enforce the lien.

Notes

Tenn. Comp. R. & Regs. 1320-04-05-.44

Original rule certified June 7, 1974.

Authority: T.C.A. §§67-5822 and 67-101.