Circuit City Stores, Inc. v. Dir. of Revenue

Two retail stores offered customers the opportunity to finance their purchases through private label credit cards. The cards were issued by banks that paid to the retailer at the time of the sale the full amount of the purchase, including sales tax, for each transaction made using the credit cards. The retailer then remitted the applicable sales tax to the State. If a customer failed to pay his or her credit card debt, the issuing bank took any tax write off. The retailers in this case separately applied for refunds of the sales tax that the banks had written off. The Director of Revenue denied both requests. The Administrative Hearing Commission reversed and allowed the retailers to claim their respective sales tax refunds. The Supreme Court reversed, holding that because, at the time of the initial transaction, the banks fully reimbursed the retailers for both the amount of the sales tax and the amount of the purchase on which that tax was based, the retailers were not entitled under statute to seek a refund of taxes the banks subsequently wrote off. View "Circuit City Stores, Inc. v. Dir. of Revenue" on Justia Law