| (a) Requirements for refund claims.
(1) Refund claims by non-permitted purchasers. A person
who does not have a sales and use tax permit and who has paid tax
in error to a permitted seller may request a refund only from the
permitted seller to whom the tax was paid. The permitted seller who
refunds tax to a purchaser may claim a refund as provided by paragraph
(2) of this subsection. A permitted seller may assign its right to
refund to the purchaser, who may then request a refund directly from
the comptroller as provided by paragraph (4) of this subsection.
(2) Refund claims by permitted sellers and third party
assignees and successors.
(A) With one exception relating to the return transactions,
no taxes, penalties, or interest will be refunded by the comptroller
to a permitted seller who has collected tax in error from a purchaser
until all such taxes are first refunded or credited with the purchaser's
written consent to the person from whom they were collected. If the
refund claim relates to a return of tangible personal property, a
permitted seller is entitled to claim a credit or request a refund
of sales tax equal to the amount of sales tax refunded to a purchaser
when the purchaser receives a full or partial refund of the sales
price of a taxable item that is returned to the seller.
(B) Before a permitted seller refunds to a purchaser
tax collected in error on the sale of a taxable item, the permitted
seller must obtain from the purchaser a properly completed exemption
or resale certificate that meets all the requirements of §3.285
of this title (relating to Resale Certificate; Sales for Resale) and
§3.287 of this title (relating to Exemption Certificates). The
permitted seller must retain the certificate to document the basis
for the refund.
(C) After the permitted seller has refunded or credited
the tax to the account of the purchaser, the permitted seller may
then seek reimbursement from the comptroller in accordance with the
procedures that are outlined in paragraph (4) of this subsection or
take a credit on a future sales and use tax return filed by the seller
in the amount refunded or credited to the account of the purchaser.
(D) Refunds on exports. See §3.323 of this title
(relating to Imports and Exports) for information about amounts a
seller can refund on taxable items that are exported by a purchaser.
(E) A permitted seller's right to a refund may be assigned
to a third party such as a creditor, settlement trustee, or successor
entity. The comptroller will grant or deny a refund claimed by a third
party assignee on the same basis as if it had been claimed by the
original seller. The third party assignee must comply with all requirements
of this section when filing any refund claim, including the requirement
to refund or credit tax paid in error to the purchaser in accordance
with subparagraph (C) of this paragraph.
(3) Refund claims by permitted purchasers.
(A) How to file a refund claim. A permitted purchaser
may amend a return for the period in which an overpayment was made,
file a refund claim with the comptroller according to the requirements
of paragraph (4) of this subsection, or take a credit on a future
sales and use tax return filed by the purchaser for taxes paid in
error to a permitted seller. The permitted purchaser must have been
permitted at the time the tax paid in error was due and payable in
order to claim a refund directly from the comptroller, amend a return
for the period in which an overpayment was made, or to take a credit
on a future sales and use tax return. If the permitted purchaser was
not permitted at the time the tax paid in error was due and payable,
the permitted purchaser must be assigned the right to refund by the
permitted seller and must file a refund claim with the comptroller
for the assigned taxes that meets the requirements in paragraph (4)
of this subsection.
(B) Sample and projection method of calculating refund
claims. A permitted purchaser who paid tax in error to a permitted
seller may compute the amount of overpayment by use of a projection
based on a sampling of transactions and on a method that complies
with generally accepted sampling methods as approved by the comptroller.
The purchaser must have been permitted for the entire period included
in the projection. The method by which the projection and computation
were performed must be retained and be made available upon request
of the comptroller.
(C) Credits.
(i) Reports and documentation. A permitted purchaser
who paid tax in error to a permitted seller and who takes credits
on tax returns is required to report the total amount of tax credit
being taken and the earliest date of the tax paid in error on a supplemental
sales tax report prescribed by the comptroller. The permitted purchaser
must retain, for the period required in Tax Code, Chapter 111, all
documentation that is necessary to support the credit claimed.
(ii) Credits allowed on certain purchases. See §3.338
of this title (relating to Multistate Tax Credits and Allowance of
Credit for Tax Paid to Suppliers) for additional rules about credits
that can be claimed by permitted purchasers.
(4) A person who requests a refund from the comptroller
must:
(A) submit a claim in writing that states fully and
in detail each reason or ground on which the claim is founded;
(B) identify the period during which the claimed overpayment
was made;
(C) include, at a minimum, each of the following about
each transaction upon which a refund is requested:
(i) purchaser or seller's name, as appropriate;
(ii) invoice number, if applicable;
(iii) date of transaction;
(iv) description of the item(s) purchased or sold;
(v) specific reason for the refund, such as applicable
statutory authority;
(vi) purchase or sale amount subject to refund;
(vii) total amount of tax refund requested;
(viii) identification of all local jurisdictions to
which tax was remitted; and
(ix) if requesting a refund for taxes paid in error
to a permitted seller, the seller's name, address and sales tax permit
number or information that allows the comptroller to identify the
seller's sales tax permit number;
(D) submit the claim within the applicable limitations
period as provided by subsection (b) of this section; and
(E) submit supporting documentation to verify any refund
claimed or credit taken, such as copies of invoices, cancelled checks,
and executed contracts. If the supporting documentation cannot be
easily mailed or otherwise easily submitted to the agency, the refund
claim must include a statement that all supporting documentation necessary
to verify the claim will be made available to the comptroller upon
request.
(b) Statute of limitations for refund claims.
(1) Unless otherwise indicated by this section, a claim
for refund must be made within four years from the date on which the
tax was due and payable as provided by Tax Code, §151.401.
(2) A claim for refund for tax paid pursuant to a deficiency
determination must be made by the later of:
(A) four years from the date on which the tax was due
and payable; or
(B) six months after the date on which the deficiency
determination for the periods becomes final, and is subject to the
restriction imposed by paragraph (3) of this subsection.
(3) A refund claim filed within six months after the
date on which a deficiency determination becomes final is within the
limitations period for all items included in the deficiency determination.
A refund claim for all other items is subject to the limitations period
in paragraph (1) of this subsection.
(4) Extension of limitations period. Before the expiration
of the statute of limitations, the comptroller and a taxpayer may
agree in writing to extend the limitation period in accordance with
Tax Code, §111.203. An extension applies only to the periods
specifically mentioned in the agreement and no single extension agreement
may be for a period that exceeds 24 months from the date of the expiration
of the limitations period being extended. Any refund request pertaining
to periods for which limitations have been extended must be made prior
to the expiration date of the agreement. Following expiration of the
agreement, the statute of limitations applies to subsequent refund
requests as if no extension had been authorized.
(5) A redetermination or refund proceeding does not
toll the statute of limitations, except for the issues contested.
(6) Failure to file a claim within the limitations
prescribed by this section constitutes a waiver of any demand against
the state on account of the overpayment.
(7) The informal review of a refund claim by the comptroller
is not a hearing or contested case and does not toll the limitation
period for any subsequent claim for refund on the same period and
type of tax for which the claim was fully or partially denied.
(8) For more information about the statute of limitations,
see §3.339 of this title (relating to Statute of Limitations).
(9) Limitations on refunds and credits claimed by organizations
exempt from sales and use tax under Tax Code, §151.310. Organizations
that are exempt from sales and use tax under Tax Code, §151.310
should see §3.322 of this title (relating to Exempt Organizations)
for information about limitations on refunds and credits that may
be claimed depending on whether the organization qualifies for exemption
either before or on or after September 1, 2009.
(10) Requirements to toll the statute of limitations.
(A) Subject to the other paragraphs of this subsection
regarding the statute of limitations, a refund claim that is filed
with the comptroller will toll the statute of limitations if the following
requirements are met:
(i) the claim states fully and in detail each reason
or ground on which the claim is founded, as required by subsection
(a)(4)(A) of this section;
(ii) the claim identifies the period during which the
claimed overpayment was made, as required by subsection (a)(4)(B)
of this section;
(iii) if the claim is being filed by a non-permitted
person who is an assignee of or successor to a refund that may be
owed, the person submits with the claim for refund the assignment
of right to refund; and
(iv) if a person other than the person to whom the
refund is due is submitting the claim for refund, a power of attorney
is submitted with the claim.
(B) If the refund claim meets the requirements of subparagraph
(A) of this paragraph, but does not meet the other requirements under
subsection (a)(4) of this section, the claim will be denied and the
person may request a hearing as provided by subsection (e) of this
section.
(C) If a person does not meet the requirements of subparagraph
(A) of this paragraph, the statute of limitations will not be tolled.
(c) Interest on Refunds.
(1) Eligibility for Interest. Interest is earned on
refunds except in the following situations:
(A) a refund claim for a period for which a report
is due before January 1, 2000;
(B) credits taken by a taxpayer on a return;
(C) tax paid on an account that is later determined
to be uncollectable and written off as a bad debt for federal tax
purposes. See §3.302 of this title (relating to Accounting Methods,
Credit Sales, Bad Debt Deductions, Repossessions, Interest on Sales
Tax, and Trade-Ins); and
(D) as otherwise determined by the comptroller.
(2) Interest rates.
(A) Refunds claimed before September 1, 2005. The interest
rate for a refund that is claimed before September 1, 2005 and granted
for a period for which a report is due after December 31, 1999 is
the rate set in Tax Code, §111.060, as provided in Tax Code,
§111.064.
(B) Refunds claimed on or after September 1, 2005.
The interest rate for a refund that is claimed on or after September
1, 2005 and granted for a period for which a report is due after December
31, 1999 is the lesser of the annual rate of interest earned on deposits
in the state treasury during December of the previous calendar year
as determined by the comptroller or the rate set in Tax Code, §111.060,
as provided in Tax Code, §111.064.
(3) Calculation of Interest. Interest accrues on refund
claims identified in paragraph (1) of this subsection at a rate determined
by paragraph (2) of this subsection on the net amount that is found
to be erroneously paid:
(A) beginning on the later of 60 days after the date
of payment or the due date of the tax report; and
(B) ending, as determined by the comptroller, on either:
(i) the date of allowance of credit that results from
either a final decision that the comptroller has issued or from an
audit; or
(ii) a date that is not more than 10 days before the
date of the refund warrant.
(d) Determining when a refund is claimed.
(1) The postmark date or its equivalent on a refund
request determines when a refund is claimed.
Cont'd... |
