(a) Requirements for refund claims.
  (1) Refund claims by non-permitted purchasers. A person who does not have a sales and use tax permit and who has paid tax in error to a permitted seller may request a refund only from the permitted seller to whom the tax was paid. The permitted seller who refunds tax to a purchaser may claim a refund as provided by paragraph (2) of this subsection. A permitted seller may assign its right to refund to the purchaser, who may then request a refund directly from the comptroller as provided by paragraph (4) of this subsection.
  (2) Refund claims by permitted sellers and third party assignees and successors.
    (A) With one exception relating to the return transactions, no taxes, penalties, or interest will be refunded by the comptroller to a permitted seller who has collected tax in error from a purchaser until all such taxes are first refunded or credited with the purchaser's written consent to the person from whom they were collected. If the refund claim relates to a return of tangible personal property, a permitted seller is entitled to claim a credit or request a refund of sales tax equal to the amount of sales tax refunded to a purchaser when the purchaser receives a full or partial refund of the sales price of a taxable item that is returned to the seller.
    (B) Before a permitted seller refunds to a purchaser tax collected in error on the sale of a taxable item, the permitted seller must obtain from the purchaser a properly completed exemption or resale certificate that meets all the requirements of §3.285 of this title (relating to Resale Certificate; Sales for Resale) and §3.287 of this title (relating to Exemption Certificates). The permitted seller must retain the certificate to document the basis for the refund.
    (C) After the permitted seller has refunded or credited the tax to the account of the purchaser, the permitted seller may then seek reimbursement from the comptroller in accordance with the procedures that are outlined in paragraph (4) of this subsection or take a credit on a future sales and use tax return filed by the seller in the amount refunded or credited to the account of the purchaser.
    (D) Refunds on exports. See §3.323 of this title (relating to Imports and Exports) for information about amounts a seller can refund on taxable items that are exported by a purchaser.
    (E) A permitted seller's right to a refund may be assigned to a third party such as a creditor, settlement trustee, or successor entity. The comptroller will grant or deny a refund claimed by a third party assignee on the same basis as if it had been claimed by the original seller. The third party assignee must comply with all requirements of this section when filing any refund claim, including the requirement to refund or credit tax paid in error to the purchaser in accordance with subparagraph (C) of this paragraph.
  (3) Refund claims by permitted purchasers.
    (A) How to file a refund claim. A permitted purchaser may amend a return for the period in which an overpayment was made, file a refund claim with the comptroller according to the requirements of paragraph (4) of this subsection, or take a credit on a future sales and use tax return filed by the purchaser for taxes paid in error to a permitted seller. The permitted purchaser must have been permitted at the time the tax paid in error was due and payable in order to claim a refund directly from the comptroller, amend a return for the period in which an overpayment was made, or to take a credit on a future sales and use tax return. If the permitted purchaser was not permitted at the time the tax paid in error was due and payable, the permitted purchaser must be assigned the right to refund by the permitted seller and must file a refund claim with the comptroller for the assigned taxes that meets the requirements in paragraph (4) of this subsection.
    (B) Sample and projection method of calculating refund claims. A permitted purchaser who paid tax in error to a permitted seller may compute the amount of overpayment by use of a projection based on a sampling of transactions and on a method that complies with generally accepted sampling methods as approved by the comptroller. The purchaser must have been permitted for the entire period included in the projection. The method by which the projection and computation were performed must be retained and be made available upon request of the comptroller.
    (C) Credits.
      (i) Reports and documentation. A permitted purchaser who paid tax in error to a permitted seller and who takes credits on tax returns is required to report the total amount of tax credit being taken and the earliest date of the tax paid in error on a supplemental sales tax report prescribed by the comptroller. The permitted purchaser must retain, for the period required in Tax Code, Chapter 111, all documentation that is necessary to support the credit claimed.
      (ii) Credits allowed on certain purchases. See §3.338 of this title (relating to Multistate Tax Credits and Allowance of Credit for Tax Paid to Suppliers) for additional rules about credits that can be claimed by permitted purchasers.
  (4) A person who requests a refund from the comptroller must:
    (A) submit a claim in writing that states fully and in detail each reason or ground on which the claim is founded;
    (B) identify the period during which the claimed overpayment was made;
    (C) include, at a minimum, each of the following about each transaction upon which a refund is requested:
      (i) purchaser or seller's name, as appropriate;
      (ii) invoice number, if applicable;
      (iii) date of transaction;
      (iv) description of the item(s) purchased or sold;
      (v) specific reason for the refund, such as applicable statutory authority;
      (vi) purchase or sale amount subject to refund;
      (vii) total amount of tax refund requested;
      (viii) identification of all local jurisdictions to which tax was remitted; and
      (ix) if requesting a refund for taxes paid in error to a permitted seller, the seller's name, address and sales tax permit number or information that allows the comptroller to identify the seller's sales tax permit number;
    (D) submit the claim within the applicable limitations period as provided by subsection (b) of this section; and
    (E) submit supporting documentation to verify any refund claimed or credit taken, such as copies of invoices, cancelled checks, and executed contracts. If the supporting documentation cannot be easily mailed or otherwise easily submitted to the agency, the refund claim must include a statement that all supporting documentation necessary to verify the claim will be made available to the comptroller upon request.
(b) Statute of limitations for refund claims.
  (1) Unless otherwise indicated by this section, a claim for refund must be made within four years from the date on which the tax was due and payable as provided by Tax Code, §151.401.
  (2) A claim for refund for tax paid pursuant to a deficiency determination must be made by the later of:
    (A) four years from the date on which the tax was due and payable; or
    (B) six months after the date on which the deficiency determination for the periods becomes final, and is subject to the restriction imposed by paragraph (3) of this subsection.
  (3) A refund claim filed within six months after the date on which a deficiency determination becomes final is within the limitations period for all items included in the deficiency determination. A refund claim for all other items is subject to the limitations period in paragraph (1) of this subsection.
  (4) Extension of limitations period. Before the expiration of the statute of limitations, the comptroller and a taxpayer may agree in writing to extend the limitation period in accordance with Tax Code, §111.203. An extension applies only to the periods specifically mentioned in the agreement and no single extension agreement may be for a period that exceeds 24 months from the date of the expiration of the limitations period being extended. Any refund request pertaining to periods for which limitations have been extended must be made prior to the expiration date of the agreement. Following expiration of the agreement, the statute of limitations applies to subsequent refund requests as if no extension had been authorized.
  (5) A redetermination or refund proceeding does not toll the statute of limitations, except for the issues contested.
  (6) Failure to file a claim within the limitations prescribed by this section constitutes a waiver of any demand against the state on account of the overpayment.
Cont'd...