Could Texas waive the 90-day purchase window for an enterprise-project sales-tax refund because unusual circumstances delayed project designation?

Plain-English summary

The Comptroller refused to create an exception to the statutory rule limiting an enterprise project's sales-tax refund to qualifying property purchased within the 90 days before project designation.

The business had moved under threatened condemnation so the city could begin building a domed stadium. It began improving its new distribution facility before it could be nominated and designated as an enterprise project, and it asked for relief because those circumstances were unusual. The Comptroller said the agency lacked authority to override the 90-day period in Tax Code § 151.429(f).

What this means for you

Equitable or unusual facts did not extend the purchase window in this letter. Even though the designation delay was tied to a Department of Commerce rule and the forced timing of the move, the Comptroller treated the 90-day limit as a statutory boundary it could not waive.

Common questions

Was the requested exception granted? No.

Why had the business bought property before designation? It moved under condemnation pressure, began improving the new facility in 1990, and could not receive enterprise-project designation until June 1991.

Why couldn't the Comptroller make an exception? The letter says the 90-day provision came from Tax Code § 151.429(f), and the agency lacked authority to alter it.

Citations and references

• Tex. Tax Code § 151.429(f) — enterprise-project refund purchase window
• 34 Tex. Admin. Code Rule 3.329 — enterprise projects

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9110L1173E14

Original ruling text

October 1, 1991

Dear **:

I apologize for the long delay in giving you a written response to your letter
inquiring about tax refunds for your client, **.

Because of threatened condemnation and pressure from the city of CITY A, who
wanted the property to begin construction of its new domed stadium, "ABC" moved
from its business location in July of 1990. "ABC" relocated in CITY A's
Eastside Enterprise Zone. The city was unable to nominate "ABC" for enterprise
project designation then because under Texas Department of Commerce rules a
project will not be designated in a zone in which there are two enterprise
projects that were designated during the same fiscal year. "ABC" had to begin
improvements to its distribution facility during 1990 when it was ineligible
for enterprise project nomination and designation. "ABC" was nominated as an
enterprise project in 1991 and received its designation from the Texas
Department of Commerce in June of 1991. Rule 3.329, relating to Enterprise
Projects, limits refunds to taxes paid on purchases made 90 days before
designation. "ABC" would like an exception to the 90 day rule on qualifying
purchases because of the unusual circumstances.

As we discussed on the telephone, the provision for an enterprise project to
claim a refund of state sales paid on certain tangible personal property
purchased within 90 days before it is designated as a project is in the tax
code Sec. 151.429 (f).

In retrospect, the Department of Commerce' limitation of two projects within a
zone in a fiscal year is not found in the statutes and may have been a better
place to ask for a rule exception at that time.

I regret that we do not have the authority to make an exception to the 90 day
statutory provision because of the unfortunate and unusual circumstances and
the Department of Commerce rules.

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

If you have other questions or need more information please call or write. The
toll-free number is 1-800-531-5441; my extension is 3-4675. The Austin number
is (512) 463-4675.

Sincerely,

Tom Soto
Tax Administration