Did a purchaser's written sales-tax refund request to a supplier stop Texas's limitations period?

Plain-English summary

The Comptroller said a purchaser's written refund request to its supplier did not stop the sales-tax refund limitations period. Under the letter's reading of Texas Tax Code chapter 111, only a refund request by the person that paid the tax directly to the Comptroller tolled the period.

The seller had received the purchaser's request in November 1987 but did not refund the purchaser and submit its own Comptroller refund request until November 1988. As a result, the January-through-September 1984 portion was lost to limitations. The letter offered a formal hearing if requested within 15 days.

Common questions

Did the purchaser's request to the seller toll limitations? No.

What action would have preserved the earlier period under the letter? The seller needed to refund the purchaser and timely submit the proper refund request to the Comptroller.

Could the requester challenge the interpretation? Yes. The letter allowed 15 days to request a formal hearing.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8901L0930A01

Original ruling text

January 25, 1989

Dear **:

I am responding to your letter dated January 6, 1989, regarding the sales
tax refund lost by statute.

You based your refund on information received in September, 1988, and
quoted from this department's literature, Refund Procedure for Tax Paid
in Error to a Retailer that:

"Refunds, by law may be requested only for tax paid in the four-year
period prior to the date a written request is received by either the
person who collected the tax or the Comptroller".

"A supplier may only refund tax which was collected in error in the
four-year period prior to the date a written refund request is received
from a purchaser".

The date of the written request for refund from the purchaser to the
supplier does not toll the statute of limitations period. Only the request
for refund by the person that paid the tax directly to the Comptroller can toll
the statute of limitations as provided by Chapter 111, Texas Tax Code. Had
your company responded to the purchaser's refund request by both refunding the
tax to the purchaser and by submitting the proper request for refund to the
Comptroller in November of 1987, rather than waiting until November,
1988, the period from January, 1984, to September, 1984, would not have been
lost to statute.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change. If you wish a formal hearing on
this legal interpretation, please file within fifteen (15) days of this
letter. This request should be submitted to our Legal Services Division.

You may write me at Tax Correspondence, Comptroller of Public Accounts.

Sincerely,

Tax Policy Division
Tax Correspondence