Bad debts

From the 2024 DOR Tax Exemption Study

82.16.050(5) - Bad debts Description Businesses may deduct bad debts from the measure of PU tax if the tax was previously paid. "Bad debts" has the same meaning as defined in the internal revenue code (26 U.S.C. Sec. 166). Purpose Provides equal tax treatment between businesses using accrual basis accounting and cash basis accounting. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $2.720 $2.770 $2.830 $2.910 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $2.540 $2.830 $2.910 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the public utilities taxable activity growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. Data Sources - Department of Revenue, Excise tax data - Economic and Revenue Forecast Council, March 2023 forecast Additional Additional Information Information Category: Tax Base Year Enacted: 1935 Primary Beneficia