CREDIT FOR BAD DEBT OR NONPAYMENT.

(a) A licensed dealer may take a credit on a return filed under this subchapter if:

(1) the dealer paid the taxes imposed by this subchapter on compressed natural gas or liquefied natural gas sold on account;

(2) the dealer determines that the account is uncollectible and worthless; and

(3) the account is written off as a bad debt on the dealer's accounting books.

(b) The return on which the credit is taken must state, if applicable, the name of the person whose account has been written off as a bad debt or who failed to remit the tax and any other information required by the comptroller. The amount of the credit that may be taken under Subsection (a) may be equal to but may not exceed the amount of taxes paid on the compressed natural gas or liquefied natural gas to which the written-off account applies.

(c) If, after a credit is taken under Subsection (a), the account on which the credit was based is paid, or if the comptroller otherwise determines that the credit was not authorized by Subsection (a), the dealer who took the credit shall pay the unpaid taxes plus a penalty of 10 percent of the amount of the unpaid taxes and interest at the rate provided by Section 111.060 beginning on the day the report showing the credit was filed and ending on the date the taxes and penalty are paid.

(d) This section does not apply to a sale of compressed natural gas or liquefied natural gas for which payment is made through the use and acceptance of a credit card.

(e) A credit under this section must be taken at the time the account is written off as a bad debt, but may only be taken before the expiration of the applicable limitation period as provided by Chapter 111.

(f) The comptroller may take action against a person in relation to whom a dealer has taken a credit for collection of the tax owed and for penalty and interest as provided by Chapter 111.