| (5) Cancellation of registration number by the comptroller.
The comptroller will cancel the registration number of a registrant
who fails to comply with the provisions of this section. For example,
the comptroller may cancel the registration number of a registrant
who fails to file an annual information report or who claims the franchise
tax research and development activities credit without first cancelling
its registration number, as required by paragraph (8) of this subsection.
The comptroller shall give written notice of the cancellation to the
registrant. The notice may be personally served on the registrant
or sent by regular mail to the registrant's address as shown in the
comptroller's records. The former registrant may not claim an exemption
under this section during the period when the registration number
is cancelled. A former registrant that purchases an item under a cancelled
registration number may be subject to a criminal penalty under Tax
Code, §151.707 (Resale or Exemption Certificate; Criminal Penalty)
and §3.287(d)(3) of this title (relating to Exemption Certificates).
(6) Effective date of cancellation. A registrant whose
registration number is cancelled by the comptroller is responsible
for remitting Texas sales and use tax, and penalty and interest from
the date of purchase, on any items purchased tax-free pursuant to
Tax Code, §151.3182 on or after the effective date of cancellation.
In the case of a registrant whose registration number is cancelled
because of a failure to file an annual information report, the effective
date of the cancellation is December 31 of the last year for which
the registrant filed an annual information report. In the case of
a registrant whose registration number is cancelled because the registrant,
as a taxable entity or as a member of a combined group, claimed the
franchise tax research and development activities credit, the effective
date of cancellation is the beginning date of the accounting period
covered by the franchise tax report on which the credit was claimed.
(7) Reinstatement following cancellation. A former
registrant who has had its registration number cancelled by the comptroller
may submit a request in writing to have the registration number reinstated.
(A) A former registrant whose registration number has
been cancelled may request reinstatement of the number be given retroactive
effect. The registrant must file an annual information report for
each prior year for which the registration number is to be effective.
(B) A registration number will not be reinstated for
periods during which the former registrant is not eligible for the
exemption under this section.
(C) Before the comptroller will reinstate a registration
number, the former registrant must remit any Texas sales and use taxes,
as well as applicable penalties and interest from the date of purchase,
on all purchases made tax-free under this section during periods when
the registrant was not eligible for the exemption under this section.
(8) Cancellation of registration number by registrant.
A registrant who has received a registration number and subsequently
chooses to claim the franchise tax research and development activities
credit must cancel the registration number. The registrant is responsible
for remitting Texas sales and use tax, and penalty and interest from
the date of purchase, on any items purchased tax-free under this section
during any accounting periods covered by a franchise tax report on
which the credit is claimed.
(f) Texas Qualified Research Sales and Use Tax Exemption
Certificate. Beginning January 1, 2014, a retailer may accept a valid
and complete Form 01-931, Texas Qualified Research Sales and Use Tax
Exemption Certificate or any form promulgated by the comptroller or
that succeeds such form, in lieu of Texas sales and use tax on the
sale of depreciable tangible personal property that qualifies for
exemption under subsection (b) of this section. To be valid and complete,
a Texas Qualified Research Sales and Use Tax Exemption Certificate
must bear the registration number issued to the registrant by the
comptroller and must be signed by the registrant or the registrant's
authorized agent. Texas Qualified Research Sales and Use Tax Exemption
Certificates are subject to the requirements of §3.287(d) of
this title. A retailer must maintain a copy of the Texas Qualified
Research Sales and Use Tax Exemption Certificate accepted in lieu
of tax on a sale and all records supporting that transaction. Refer
to §3.281 of this title (relating to Records Required; Information
Required).
(g) Divergent use. When a registrant uses an item purchased
under a valid Texas Qualified Research Sales and Use Tax Exemption
Certificate in a taxable manner, the registrant is liable for payment
of Texas sales and use tax, plus penalty and interest as applicable,
based on the fair market rental value of the tangible personal property
for the period of time used in the taxable manner. This subsection
applies to an item that is used for any purpose other than for use
in qualified research, whether that use occurs before, during, or
after the time when the item is used in qualified research. Refer
to Tax Code, §151.155 (Exemption Certificate).
(h) Refund of Texas sales and use tax paid on depreciable
tangible personal property used in qualified research. A registrant
with a valid registration number may file a claim for refund of Texas
sales and use tax paid on purchases made on or after the later of
January 1, 2014, or the effective date of the registration number,
that qualify for exemption under subsection (b) of this section in
accordance with the requirements of §3.325 of this title.
(i) Effective dates.
(1) The provisions of this section apply to the sale,
storage, or use of tangible personal property occurring on or after
January 1, 2014.
(2) The sales and use tax exemption for depreciable
tangible personal property used in qualified research expires on December
31, 2026.
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| Source Note: The provisions of this §3.340 adopted to be effective November 30, 2015, 40 TexReg 8663; amended to be effective October 24, 2021, 46 TexReg 7048; amended to be effective August 4, 2022, 47 TexReg 4556 |
