Illinois Court Issues Ruling in Bad Debt Claim Sought by Finance Company

On November 2, 2016, the Illinois Appellate Court held that a finance company was entitled to a refund of Retailers’ Occupation Tax associated with uncollectible debt on credit and installment contracts. The refund claim was originally filed by the finance company with the Illinois Department of Revenue. The claim was denied by the Department for, among other reasons, they did not bear the burden of the tax, they were not the remitter of the tax to the State, and the assignments from the retailers did not give the finance company a right to the refund.