How could customers recover Texas sales tax paid on books and publications during the historical Texas Monthly refund period?

Plain-English summary

This 1990 letter concerned a historical refund period following Texas Monthly v. Bullock. The letter said the former statute exempting religious publications was unconstitutional and had been fixed on August 28, 1989. To equalize treatment, Texas was returning tax paid on other books and publications before the fix, as far back as the limitation period allowed.

The Comptroller described two methods. The easier method was for the seller to refund the customer by check or signed credit memo, then claim a credit on the next sales-tax return or amend the return on which the tax was paid. Alternatively, the seller could assign its refund right to the customer, but that method required invoice numbers, dates, and other supporting information.

What this means for you

This letter explains a time-limited historical refund process, not an ongoing exemption claim. It also shows that the seller-refund route and assignment route carried different paperwork burdens.

Common questions

Why were refunds available? Because the U.S. Supreme Court had held the old religious-publication exemption unconstitutional, while comparable publications had been taxed.

What method did the Comptroller consider easiest? A seller-issued check or signed credit memo, followed by a return credit or amended return.

Could the customer pursue the refund through an assignment? Yes, with the supporting invoice and date information described in the letter.

Did the refund reach all historical purchases? No. The available period was limited by the statute of limitations and was shrinking over time.

Citations and references

• Texas Monthly v. Bullock — U.S. Supreme Court decision described in the letter

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9010L1046G14

Original ruling text

October 1, 1990

Dear **:

As you may have heard, your customers can get back tax on books and other
publications they bought during a three-year period from roughly the latter
part of 1986 through the middle of 1989. (This period will shrink as the
statute of limitations runs.)

What's behind the refund is a U.S. Supreme Court case, Texas Monthly v.
Bullock, that says our old statute exempting religious publications was
unconstitutional. (The statute was fixed on August 28, 1989.) Because of the
statute, we weren't collecting tax on writings that religious groups sold but
were getting it on the type of publications you sell. To make the playing field
level we are returning tax your customers paid before the statute was fixed, as
far back as the statute of limitations will let us.

We believe by far the easiest method of returning this money is for you to
write your customer a check or give him a credit memo that he signs. Then you
can get your refund by simply taking a credit on your next sales tax return.
(The instructions are on the back of the return.) You can also amend the return
you filed when you paid the tax.

The other way to go is to assign your right to the refund to your customer.
This will mean some effort on your part, because there are some invoice numbers
and dates we need that your customer will probably ask you for.

I've attached more detailed information to this letter. There's an example of
an assignment form, a sample schedule, and list of things your customer will
need to tell us if you use the assignment method.

Linda White or Charlie Ferrell can help you out with any problems. They can be
reached on our watts line at 1-800-252-5555, extension 3-4545. Our local number
is 512-463-4545.

Sincerely,

Alvin Miller
Director
Revenue Accounting Division