taxes

Sales Tax Refunds - Frequently Asked Questions

What does "toll the statute of limitations" mean?

Generally, a person or business has four years from the date the tax was originally due and payable to the state to claim a refund for tax that has been paid in error. When a refund claim tolls the statute of limitations, that means the "clock stops running" for the specific reasons stated in the refund claim. The claim must include all required elements in order to toll the statute. The Comptroller may send you a notice that asks for information that supports your refund claim, including documents such as invoices and cancelled checks, and you must provide this information within 30 days of the notice.

What is the purpose of the credit memo acceptance?

The seller of a taxable item who collected sales tax in error must refund the tax to the purchaser before submitting a refund claim to the Comptroller's office. The seller can either refund the tax or give the purchaser credit for the tax paid in error. Form 01-136, Credit Memo Acceptance (PDF), states that the seller gave the purchaser a credit on their account (instead of refunding the tax directly). The purchaser acknowledges the credit by signing the form. With this documentation, the Comptroller's office can then process the refund request for the seller.

Why do I have to complete an Assignment of Right to Refund form?

This Form 00-985, Assignment of Right to Refund (PDF), is needed when the purchaser does not have a sales tax permit at the time of purchase. You have to complete an assignment form because you are seeking a refund of tax you paid, but you are not the person who remitted the tax to the Comptroller's office. The person from whom you purchased the taxable item collected and remitted the tax. The assignment form is the "permission slip" from the seller that allows you to pursue the refund directly from the Comptroller's office.

What do "assignor" and "assignee" mean on the assignment of right to refund form?

The assignor is the entity that collected the sales tax and remitted it to the Comptroller's office. The assignee is the customer who paid the sales tax on the purchased item. Complete and submit a separate Form 00-985, Assignment of Right to Refund (PDF), for each vendor for which you are claiming a refund.

What are the requirements for a predominant use study when a person is seeking a refund claim related to the purchase of natural gas or electricity?

A complete predominant use study:

  • includes 12 consecutive months of utility usage
  • establishes that the electricity the meter measures is predominantly (more than 50 percent) used in a tax-exempt manner
  • must be certified by a registered engineer or a person with an engineering degree from an accredited engineering college
  • is one where the owner of the business certifies that all items using natural gas or electricity (depending on which utility is covered by the study) are listed and that the hours of use for each item are correct
  • includes the certification of both the engineer and the owner on the face of the study
How long will it take to get my refund?

The time required to verify, process and pay your refund will vary depending on the size and complexity of your refund request. You can help reduce the amount of time it takes to verify your claim by providing all documentation and information requested by the specified deadline.

How do I package and mail multiple amended returns?

If you are amending returns for multiple periods, submit all of your returns in one envelope to:

  • Texas Comptroller of Public Accounts
  • Attn: Sales and Motor Vehicle Tax Refunds
  • 111 E. 17th Street
  • Austin, TX 78774-0100