2006 Alaska Statutes
Title 43 REVENUE AND TAXATION
Chapter 43.40. MOTOR FUEL TAX
Sec. 43.40.025. Handling of tax in sales or transfers of motor fuel in certain credit transactions.

(a) This section applies when a dealer who sells or otherwise transfers motor fuel in one or more credit transactions in the state subsequently determines that the person to whom the motor fuel was sold or transferred in the credit transaction

(1) has become a debtor under 11 U.S.C. (Federal Bankruptcy Act); or

(2) has ceased to pay the person's debts in the ordinary course of business or cannot pay the person's debts as they become due, and the dealer treats the person's debt as a worthless debt or partially worthless debt under 26 U.S.C. 166.

(b) A dealer is entitled to a credit in an amount equal to the tax remitted to the department for the tax due on sales or transfers of motor fuel in circumstances described in (a) of this section if

(1) under this chapter, the sales or transfers result in a tax liability in the aggregate of $500 or more; and

(2) the dealer has submitted a statement and remitted the tax due on the transactions under AS 43.40.010 (c).

(c) The dealer may not claim or obtain a refund of the amount of a credit to which the dealer is entitled under (b) of this section. The dealer may apply the credit authorized by (b) of this section against the motor fuel tax payable under this chapter by the dealer to the state

(1) during the month in which the dealer provides written notification to the department of the claim of the credit accompanied by a copy of the bankruptcy petition filed by the person to whom the motor fuel was sold or transferred; or

(2) in the first month after the dealer reports to the Internal Revenue Service that the debt of the person to whom the motor fuel was sold or transferred is a worthless debt or partially worthless debt by claiming the debt as a deduction under 26 U.S.C. 166.

(d) If, as to a credit transaction described in (a) of this section for which a credit was claimed and allowed under (b) and (c) of this section, the person to whom the motor fuel was sold or transferred later makes payment to the dealer of

(1) all of the debt due on the transactions, the dealer shall remit payment to the department of the tax as required by AS 43.40.010 ;

(2) a portion of the debt due on the transactions, the dealer shall remit payment to the department of a proportional part of the tax as required by AS 43.40.010 .

(e) The commissioner may not allow a dealer a credit under this section for the credit transaction debt of a person if the dealer claiming the credit has, within the five-year period immediately before making the claim of the credit, previously submitted a statement under (c)(2) of this section that a credit transaction debt of that person is a worthless debt or partially worthless debt under (c)(2) of this section.

(f) This section does not apply to a credit transaction by a dealer who sells or otherwise transfers motor fuel in a credit transaction after the dealer knows that the person to whom the motor fuel was sold in the credit transaction has become a debtor under 11 U.S.C. (Federal Bankruptcy Act).

(g) In this section, "credit transaction" means a transaction by which the payment for motor fuel subject to the tax levied under this chapter is to be made at a future date.