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Department details repossession tax credit, new calculator and eligibility change effective 07/01/2023
Summary
Revenue staff walked dealers through the repossession tax-credit rules, demonstrated a downloadable Excel repossession-credit worksheet, and highlighted a statutory change (effective 07/01/2023) that limits the credit to dealers meeting specific criteria and requires departmental confirmation before claiming the credit.
Dealers learned how to document and claim a repossession tax credit during the webinar and were shown a new Excel worksheet the department has published to simplify the calculation. Katie explained that when a dealer repossesses property sold with an unpaid balance greater than $500, the dealer may deduct an amount equal to the unpaid balance minus $500 (excluding interest and carrying charges) if records are retained documenting parties, dates of sale and repossession, original purchase price and unpaid balance.
The webinar also highlighted a statutory change: "As of 07/01/2023, the repossession credit is available to a dealer who principally sells used cars, collects down payment averaging not more than 5% of the automobile sales price, and assigns 100% of its security instruments to an affiliated finance company," the presenter said, adding that the law requires dealers to receive Department confirmation before utilizing the credit. The panel demonstrated the repossession-credit Excel worksheet and encouraged dealers to save it as supporting documentation for returns.
