Indiana Department of Revenue v. 1 Stop Auto Sales, Inc.

ON PETITION FOR REVIEW FROM THE INDIANA TAX COURT

SULLIVAN, Justice.

The Tax Court held that 1 Stop Auto Sales, Inc., an auto dealership that financed its eustomers' purchases, was not required to reduce the amount of its bad debt deduction by the value of repossessed collateral when calculating its sales tax liability. We reverse the Tax Court's decision, finding that the Legislature intended that only the net debt that is unable to be collected may be deducted for these purposes.

Background

1 Stop is an automobile dealership that sells vehicles on what it describes as a buy-here, pay-here…