{"data":{"id":"us-ok/okla.-stat.-tit.-68-68-1366","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 68, § 68-1366","heading":"Deduction from taxable sales for bad debts","body":"A. There is herein provided a deduction to the vendor from\n\ntaxable sales for bad debts. Any deduction taken that is attributed\n\nto bad debts shall not include interest.\n\nB. The federal definition of “bad debt” in 26 U.S.C., Section\n\n166 shall be the basis for calculating bad debt recovery. However,\n\nthe amount calculated pursuant to 26 U.S.C., Section 166, shall be\n\nadjusted to exclude:\n\n1. Financing charges or interest;\n\n2. Sales or use taxes charged on the purchase price;\n\n3. Uncollectible amounts on property that remain in the\n\npossession of the seller until the full purchase price is paid; and\n\n4. Expenses incurred in attempting to collect any debt and\n\nrepossessed property.\n\nC. Bad debts may be deducted on the return for the period\n\nduring which the bad debt is written off as uncollectible in the\n\nclaimant’s books and records and is eligible to be deducted for\n\nfederal income tax purposes if the taxpayer kept accounts on a cash\n\nbasis or could be eligible to be claimed if the taxpayer kept\n\naccounts on an accrual basis. For purposes of this subsection, a\n\nclaimant who is not required to file federal income tax returns may\n\ndeduct a bad debt on a return filed for the period in which the bad\n\ndebt is written off as uncollectible in the claimant’s books and\n\nrecords and would be eligible for a bad debt deduction for federal\n\nincome tax purposes if the claimant was required to file a federal\n\nincome tax return.\n\nD. If a deduction is taken for a bad debt and the debt is\n\nsubsequently collected in whole or in part, the tax on the amount so\n\ncollected must be paid and reported on the return filed for the\n\nperiod in which the collection is made.\n\nE. When the amount of bad debt exceeds the amount of taxable\n\nsales for the period during which the bad debt is written off, a\n\nrefund claim may be filed within the statute of limitations for\n\nrefund claims provided in Section 227 of this title; however, the\n\nstatute of limitations shall be measured from the due date of the\n\nreturn on which the bad debt could first be claimed.\n\nF. Where filing responsibilities have been assumed by a\n\ncertified service provider, the certified service provider may\n\nclaim, on behalf of the seller, any bad debt allowance provided by\n\nthis section. The certified service provider must credit or refund\n\nthe full amount of any bad debt allowance or refund received to the\n\nseller.\n\nG. For the purposes of reporting a payment received on a\n\npreviously claimed bad debt, any payments made on a debt or account\n\nare applied first proportionally to the taxable price of the\n\nproperty or service and the sales tax thereon, and secondly to\n\ninterest, service charges, and any other charges.\n\nH. In situations where the books and records of the party\n\nclaiming the bad debt allowance support an allocation of the bad\n\ndebts among the states which are members of the Streamlined Sales\n\nand Use Tax Agreement, the allocation will be permitted.","path":["OK Code","Title 68"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"142013eae50083a583f087a6a456e2939bfd8d8c909385dd8cccc090fc903068","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-68-68-1365.1","next":"us-ok/okla.-stat.-tit.-68-68-1368"},"notice":"GroundRules: Original legal text. Not legal advice."}