Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter O - STATE AND LOCAL SALES AND USE TAXES › Section 3.325 - Refunds and Payments Under Protest

Current through Reg. 49, No. 28; July 12, 2024
(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.