Who had to claim a Texas sales-tax refund when the purchaser paid tax to the seller, and what limitations period did the letter state?

Plain-English summary

The Texas Comptroller said the machinery purchaser could not obtain a refund directly from the state because it had paid the tax to the seller rather than remitting it to Texas.

The purchaser first had to obtain a refund from the seller. After refunding the purchaser, the seller could apply to the state.

The letter said there was no 21-day limit for refund requests and that Texas was not bound by sellers' and purchasers' internal office procedures. It stated a four-year limitations period measured from the date the tax was due and payable.

What this means for you

The refund path followed who remitted the tax. A purchaser that paid the seller had to work through that seller rather than bypassing it with a direct state claim.

Common questions

Could the purchaser claim directly from Texas? No.

Who had to refund the purchaser? The seller.

Could the seller then claim from Texas? Yes.

Did a private 21-day procedure bind Texas? No.

What limitations period did the letter state? Four years from when the tax was due and payable.

Citations and references

• Comptroller Rule 3.325(b) — refunds, interest, and payments under protest.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8701L0788A14

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

January 14, 1987

Dear *****:

Thank you for your letter of December 19, 1986, concerning a refund of
Texas
sales tax paid to CORP A for machinery purchased in *, Texas
and delivered to **, Tennessee.

Unfortunately, you must obtain a refund of the sales tax paid to CORP A
from CORP A. You may not obtain a refund directly from the state since
you did not remit the tax directly to the state. After CORP A refunds to
you, they may apply for a refund from the state. Please refer to Section
(b) of the enclosed Rule 3.325 Refunds, Interest and Payments under
protest.

There is no 21 day time limit of refund requests. The State of Texas is
not
bound by the internal office procedures of sellers and purchasers. The
statute of limitations is four years from the date on which the tax was
due
and payable.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call me at
1-800-252-5555 toll free anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Administration Division.

Sincerely,
Julie Pesl
Tax Policy Section
Tax Administration Division