SECTION 3.75. Refunds, Payments Under Protest, Payment Instruments and Dishonored Payments

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Dealer--A motor vehicle seller licensed by the Texas Department of Transportation in accordance with Occupations Code, Chapter 2301, or Transportation Code, Chapter 503, to sell motor vehicles.

(2) Rental Company--A motor vehicle rental provider permitted under Tax Code, §152.065.

(3) Seller-Financed Sales--A retail sale of a motor vehicle by a dealer in which the seller collects all or part of the total consideration in periodic payments and retains a lien on the motor vehicle until all payments have been received.

(b) Refunds.

(1) Tax paid to state. Any person, or the person's attorney, assignee, or other successor may request from the comptroller a refund of any tax that the person directly paid and remitted to the state but that was not due.

(A) The refund request must be made within:

(i) four years from the date on which the tax was due and payable; or

(ii) six months after a determination for the periods for which the refund is claimed becomes final; or

(iii) six months after any determination would have become final had payment not been made before the due date.

(iv) a claim for refund of an amount paid pursuant to a deficiency determination is timely for all transactions included in the deficiency determination if made in accordance with clauses (ii) or (iii) of this subparagraph. A claim for refund for items not included in a deficiency determination must be made in accordance with clause (i) of this subparagraph.

(B) Before the expiration of the statute of limitations, the comptroller and a taxpayer may agree in writing to an extension of the statute of limitations.

(C) An extension applies only to the periods specifically mentioned in the agreement. Any assessment or 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 assessments and refund requests as if no extension had been authorized.

(D) The request for a refund must be made in writing and must state fully and in detail the specific grounds upon which the claim is founded. The request must also indicate the period for which the claimed overpayment was made. The claim must be submitted within the applicable limitation period as provided in subparagraph (A) of this paragraph, and must include supporting documentation.

(E) The comptroller may require a person to submit additional information to verify the refund claim. The person must show to the satisfaction of the comptroller that the refund is due and make available to the comptroller any documentation that the comptroller requires to process the refund.

(F) In determining the statute of limitations for filing a refund claim, the time during which an administrative proceeding is pending before the comptroller for the same period is not counted. A taxpayer may not file a claim for the same transaction and for the same time period as a refund claim previously denied.

(G) Failure to file a claim within the limitation prescribed by this section constitutes a waiver of any demand against the state on account of the overpayment.

(2) Tax paid to county tax assessor-collector. Tax paid to the county tax assessor-collector should be recovered in the same manner as prescribed in paragraph (1) of this subsection. The county tax assessor-collector by having remitted tax collected and submitting record of each transaction to the comptroller, authorizes the comptroller to accept refund requests directly from the claimant, to determine the eligibility of the refund and to make eligible refunds. The written refund request should include a copy of the receipt issued by the county tax assessor-collector for payment of taxes and the taxpayer's social security number, federal employers identification number, or comptroller assigned tax permit number.

(3) Tax paid to a dealer on sales other than seller-financed sales where the dealer is required to remit the tax to the county tax assessor-collector pursuant to Tax Code, §152.0411. Tax paid to dealer should be recovered in the same manner as prescribed in paragraph (1) of this subsection. The county tax assessor-collector by having accepted and remitted the tax collected, and submitting record of each transaction to the comptroller, authorizes the comptroller to accept refund requests directly from the claimant, to determine the eligibility of the refund and to make eligible refunds. The written refund request should include a copy of the receipt issued by the county tax assessor-collector for payment of taxes and the taxpayer's social security number, federal employers identification number, or comptroller assigned tax permit number.

(4) Tax paid to a dealer on seller-finance sales. A person who remits tax to a dealer may not request from the comptroller a refund of any tax that the person has remitted to a seller but contends was not due. The tax must be recovered from the seller.

(A) A written request for a refund must be directed to the dealer and must state the specific grounds upon which the claim is founded. The written request should be retained by the dealer to document the reason tax was refunded.

(B) After the dealer has refunded or, with the purchaser's written consent, credited the tax to the account of the purchaser, the dealer may then seek reimbursement from the state in accordance with the procedures outlined in paragraph (1) of this subsection, or take a credit on the dealer's next return in the amount refunded or credited to the account of the purchaser.

(5) Tax paid to a rental company. A person who remits tax to a rental company may not request from the comptroller a refund of any tax that the person has remitted to a rental company but contends was not due. The tax must be recovered from the rental company.

(A) A written request for a refund must be directed to the rental company and must state the specific grounds upon which the claim is founded. The written request should be retained by the rental company to document the reason tax was refunded.

(B) After the rental company has refunded or, with the purchaser's written consent, credited the tax to the account of the purchaser, the rental company may then seek reimbursement from the state in accordance with the procedures outlined in paragraph (1) of this subsection, or take a credit on the rental company's next return in the amount refunded or credited to the account of the purchaser.

(6) Tax refund made pursuant to Occupations Code, Chapter 2301 ("Lemon Law"). A manufacturer or distributor who repurchased a vehicle under Occupations Code, Chapter 2301 or similar terms, and who refunded tax to the purchaser may request a refund in the same manner as prescribed in paragraph (1) of this subsection.

(A) The refundable amount is limited to tax computed on the dollar amount refunded. A deduction will be made for any usage charges.

(B) If the tax was initially reduced by a deduction allowed under Tax Code, §152.002(b), any refund will be made on a similar proportional basis.

(C) The manufacturer or distributor must obtain an assignment from the purchaser.

(c) Payments under protest.

(1) Payment made to a county tax assessor-collector.

(A) If, pursuant to the authority of Tax Code, §112.051, motor vehicle sales and use taxes are paid under protest to a county tax assessor-collector, the protest payment to the tax assessor-collector must be accompanied by a written letter of protest that sets out in detail each and every ground or reason why the taxpayer contends that the assessment is unlawful or unauthorized. Immediately upon receipt of the protest payment and written protest, a copy of the protest letter must be sent to the comptroller by the tax assessor-collector together with a copy of the tax receipt showing that tax was paid. If the taxpayer fails to submit to the county tax assessor-collector the letter of protest at the time of payment, the tax should be remitted normally by the tax assessor-collector.

(B) The payment of taxes under protest to a county tax assessor-collector is limited to those taxes that the tax assessor-collector is authorized to receive.

(C) It is the duty of the county tax assessor-collector to transmit the full amount of all motor vehicle sales and use taxes paid under protest to the comptroller. The tax assessor-collector shall transmit these protest payments to the comptroller daily and the tax assessor-collector must inform the comptroller in writing that such taxes were paid under protest.

(2) Payment made to the comptroller. A written letter of protest that sets out fully and in detail each and every ground or reason why the taxpayer contends that the assessment is unlawful or unauthorized must accompany the payment. If the payment and letter of protest do not accompany one another, the payment will be deemed not to have been made under protest.

(d) Payment Instruments.

(1) The comptroller authorizes money orders, cash, cashier's checks, and certified checks as valid methods of payment of motor vehicle sales and use taxes to a county tax assessor-collector. If a county tax assessor-collector accepts personal checks as payment instruments, the county tax assessor-collector is relieved of liability only if the county tax assessor-collector requires at least the following identification:

(A) personal data including name, home address, home telephone number, name and location of employer, and telephone number of employer;

(B) driver's license number of the person signing the check; and

(C) license plate number of motor vehicle(s) owned by person signing the check.

(2) if a county tax assessor-collector accepts a personal check in payment of motor vehicle sales and use taxes, and the personal check is not honored, the county tax assessor-collector may request the assistance of the comptroller in collecting the monies due if, within the statute of limitations set forth in subsection (b)(1) of this section, the county tax assessor-collector certifies on a form promulgated by the comptroller:

(A) the identification information required by this section;

(B) two dates upon which the county tax assessor-collector sent the check to the appropriate bank;

(C) the date upon which the sheriff attempted to seize the license plates if the fees for the plates were included in the check; and

(D) the date(s) the county tax assessor-collector took other collection action, such as filing a complaint with the county attorney or hiring a collection agency.

(e) Voided Receipt Because of Dishonored Payment. A county tax assessor-collector has no authority to void a motor vehicle sales tax receipt and not report the tax payment when the check given in payment of the tax is returned unpaid.

Source Note: The provisions of this §3.75 adopted to be effective December 6, 1996, 21 TexReg 11489; amended to be effective September 30, 2010, 35 TexReg 8762