Nevada Administrative Code
Chapter 372 - Sales and Use Taxes
BAD DEBT DEDUCTION
Section 372.539 - Method for determining actual cash value of motor vehicle; retention of books and records substantiating actual cash value

Universal Citation: NV Admin Code 372.539

Current through December 12, 2024

1. For the purposes of NRS 372.368 and 374.373 and NAC 372.536, the actual cash value of a motor vehicle that has been repossessed by a retailer is the wholesale price published in a price guide recognized in the retailer's industry for a motor vehicle of the same make, model and year which is in the same condition as the actual condition of the motor vehicle at the time the motor vehicle was repossessed.

2. The cost to repossess or improve the condition of a motor vehicle which has been repossessed may not be deducted from the actual cash value of the motor vehicle.

3. A retailer who claims a bad debt deduction for a motor vehicle that has been repossessed by the retailer shall retain, in the dealer jacket for the motor vehicle and with the books and records of the retailer, documentation substantiating the actual cash value of the motor vehicle at the time it was repossessed, including, without limitation:

(a) A copy of the published wholesale price which was used to determine the actual cash value of the motor vehicle pursuant to subsection 2.

(b) If the retailer receives a check from an insurer for the partial loss of the motor vehicle, a copy of that check.

(c) If the motor vehicle is sold at auction or to a salvage yard, proof of payment from that sale.

(d) If the actual cash value of the motor vehicle was determined pursuant to subsection 1, documentation demonstrating the condition of the motor vehicle at the time of repossession which may include, without limitation:
(1) Pictures documenting the condition of the motor vehicle at the time of repossession; or

(2) Inspection documents prepared by the retailer of the motor vehicle substantiating the condition of the motor vehicle at the time of repossession.

4. If a motor vehicle that was repossessed by a retailer is sold by the retailer, the retailer must collect and remit sales tax on the sales price of the motor vehicle from the new sale.

5. If a retailer receives full payment from an insurance company on a debt for a motor vehicle that has been involved in an accident, the retailer may not claim a bad debt deduction for the sale of the motor vehicle.

Added to NAC by Tax Comm'n by R191-18, eff. 12/19/2018

NRS 360.090, 372.368, 372.725, 372.735, 374.373, 374.725, 374.740

Disclaimer: These regulations may not be the most recent version. Nevada may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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