Texas Letter Ruling 9211L1203A01: Thirteen Period Accounting Calendar Year

Plain-English summary

The Texas Comptroller's Tax Administration Division approved a request from a group of corporations managed by an affiliated corporation to keep filing their Texas sales tax returns (not hotel tax) using a thirteen-period fiscal accounting calendar rather than standard calendar months. The permission covers entities on the attached list as well as any new entities added later, as long as the taxpayer notifies the Comptroller when entities are added so the list stays current.

The Texas Tax Code otherwise requires reports to be filed on a calendar basis, but the letter confirms it is permissible to file based on a fiscal calendar instead. Returns are still due on the 20th of the month, and that due date can only move for weekends, holidays, or other non-working days. The letter spells out the filing mechanics:

• If a fiscal accounting period ends on the 1st through the 10th of a month, that period's data is reported on the prior month's return, due the 20th of the current month (e.g., a period ending April 1–10 is reported on the March return, due April 20).
• If a fiscal accounting period ends on the 11th through the last day of a month, that period's data is reported on that month's return, due the 20th of the next month (e.g., a period ending June 1–30 is reported on the June return, due July 20).

Because the Comptroller's system only accepts 12 monthly returns per calendar year but a 13-period fiscal calendar produces 13 periods, two of the taxpayer's accounting periods must be combined onto a single return each year. The letter notes that the specific combination and due dates were worked out and enclosed as a schedule for the taxpayer's records, and it warns that the preprinted report period ending dates on the returns must not be changed or the returns will not process.

What this means for you

Businesses using a 13-period (4-4-5 style) fiscal calendar

If your company's accounting system runs on a thirteen-period fiscal year rather than standard calendar months, this letter shows the Comptroller can grant permission to file Texas sales tax returns on that same fiscal calendar. You still file monthly-style returns due on the 20th, and you still need a mapping of fiscal periods to specific return due dates -- plus a plan for combining two periods onto one return since only 12 returns are accepted per year.

Corporate groups with multiple affiliated filers

The permission here extends to a whole group of corporations managed by one parent/managing corporation, including future entities added to the group, provided the Comptroller is notified when new entities are added so its list of approved filers stays current.

Accountants and tax professionals

This is an individual grant of permission, not a general rule, and it applies specifically to sales tax returns (the letter explicitly excludes hotel tax). Because it's a STAR letter ruling issued to a specific, redacted taxpayer, don't assume it authorizes fiscal-calendar filing for a different taxpayer without a similar request. Also note the operational trap flagged in the letter: altering the preprinted report period ending dates on the returns will cause processing failures.

Common questions

Q: Can a Texas taxpayer file sales tax returns based on a fiscal year instead of calendar months?
A: Texas Tax Code generally requires calendar-basis reporting, but this letter confirms the Comptroller can permit fiscal-calendar filing, including a thirteen-period accounting calendar, for a taxpayer that requests and receives permission.

Q: What happens with the 13th period if the Comptroller's system only takes 12 returns a year?
A: Two of the taxpayer's accounting periods must be combined onto a single return, with the combination and due dates set out in a schedule provided by the Comptroller.

Q: Are the return due dates still the 20th of the month?
A: Yes. Returns remain due the 20th of the month, adjustable only for weekends, holidays, and other non-working days.

Q: How are fiscal period-end dates matched to a due date?
A: Periods ending the 1st–10th of a month are reported on the prior month's return (due the 20th of the current month); periods ending the 11th through the last day of a month are reported on that month's return (due the 20th of the next month).

Q: Does this cover hotel occupancy tax too?
A: No. The letter expressly says the permission is for sales tax returns, not hotel tax.

Q: Can the report period ending dates on the returns be changed by the taxpayer?
A: No. The letter warns that changing the preprinted report period ending dates will cause the returns not to process.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9211L1203A01

Original ruling text

November 3, 1992

Dear ***:

Permission is granted for various corporations managed by *** Corporation
to continue filing sales (not hotel tax) tax returns based on your thirteen
period accounting calendar whether shown on the attached list or added in the
future. Please send notification when new entities are added so our list
remains current.

The Texas Tax Code requires reports to be filed on a calendar basis; however,
it is permissible to file based on your fiscal calendar. The returns are due
on the 20th day of the month and that due date cannot be extended except by
weekends, holidays, and other such non working days. The filing procedure
required by Texas is outlined below:

-- For accounting periods ending the first through the 10th day of the month,
the due date will be the 20th of that month (i.e., if the accounting period
ends April 1 through April l0, the data is to be reported on the March return
due April 20).

-- For accounting periods ending on the 11th through the last day of the
month, the due date will be the 20th of the next month (i.e., if the'
accounting period ends June 1 through June 30, the data is to be reported on
the June return due July 20).

Also, our commuter will accent only 12 monthly returns in a calendar year, two
of your accounting periods must be combined on one return. I have indicated
this combination and the respective due dates in the schedule which I have
enclosed for your records. Please do not change the preprinted report period
ending dates on the returns. If the dates are changed, the returns will not
process. The due date is shown on each return.

Tax Administration Division