Hotel Occupancy Tax Permitted Sellers

Requesting a Refund of Tax Collected from a Customer in Error

If you are a seller who collected tax in error, the Comptroller cannot refund tax, penalty or interest until you have:

  • either refunded to the purchaser the tax collected in error, or
  • provided a credit to the purchaser for the tax collected in error (with the purchaser's written consent; use Form 89-123, Credit Memo Acceptance (PDF)), and
  • obtained an exemption certificate from the purchaser, if the purchaser is asking for the refund because they are exempt from hotel tax.

A seller who is due a tax refund can:

  • take a credit in the amount of the refund or credit on a future tax return,
  • amend the return to take a credit in the amount of the refund or a credit for the period in which the tax was paid, or
  • request a refund from the Comptroller.

Taking a Credit on a Future Return or Amending a Return

You must file Form 12-100, Texas Hotel Occupancy Tax Report (PDF), to take a credit on a return. Reduce the amount of total taxable receipts in column 5 by the purchase price of the items on which tax was paid in error. Reduce taxable receipts by the price paid for the goods or services, not including the tax.

EXAMPLE: You owe $100,000 in hotel tax on your next return, but you are due a $20,000 refund because you overpaid tax on a previous return. You can report tax due of $80,000 on this return. Total taxable receipts would be $133,333.00 ($80,000/.06). Be sure to keep good records to show why and how the reduction was made.

You can also amend an original return you filed. Follow the instructions on the form used to file the original return. You cannot electronically file an amended return that reduces the tax due after the due date for the period being amended.

It is not necessary to file amended returns for separate periods in separate envelopes. For efficient processing, the Comptroller's office will review all the amended returns filed at the same time.

While waiting for a response about the approval or denial of your credit, keep filing hotel tax reports and paying the tax due. If you fail to report and pay hotel tax liabilities on time, you will be assessed penalties and interest on the unreported or unpaid amounts.

Sellers Can Assign Their Right to Refund to a Purchaser

A permitted seller can assign a right to refund to the purchaser, from whom the tax was collected in error, allowing the purchaser to file a refund claim directly with the Comptroller's office.

Assignees of and Successors to Permitted Sellers

A permitted seller can assign a right to refund to a third party such as a creditor, settlement trustee or successor entity. The Comptroller's office will treat the refund claim as if the original seller had submitted it. The assignee must comply with the same requirements as the seller when filing any refund claim, including the requirement to refund or credit tax paid in error to any purchasers.