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Texas Taxes

Sales Tax Refund for Providers of Cable Television, Internet Access or Telecommunications Services

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Overview

For assistance requesting a refund through our online system, contact us.

1-844-519-5671
citrus.help@cpa.state.tx.us

Effective Sept. 1, 2013, the law allows providers of cable television, Internet access or telecommunications services to claim a refund of the 6.25 percent Texas state sales and use tax paid on qualifying purchases.

A “qualifying purchase” is tangible personal property:

  • purchased, leased or rented by a provider or its subsidiary on which Texas state sales and use tax was paid by the provider or subsidiary;
  • directly used or consumed by the provider or subsidiary in or during the:
    • distribution of cable television service;
    • provision of Internet access service; or
    • transmission, conveyance, routing or reception of telecommunications services; and
  • on which Texas state sales and use tax was paid in the calendar year immediately preceding the calendar year in which the request for refund is submitted.

The refund does not apply to:

  • local sales and use tax; or
  • sales and use tax paid on property directly used or consumed in or during the provision, creation or production of data processing or information services, except for equipment used to provide such services as part of a single charge for Internet access service as set out in Rule 3.366, Internet Access Services.

Overview (Continued)

The amount available for refund under this program is capped at $50 million each calendar year. If the total of all qualifying refund requests received for a calendar year exceeds the cap, each eligible provider or subsidiary requesting a refund will receive a pro rata share.

Because the law became effective Sept. 1, 2013, the $50 million refund issued in 2014 will apply to Texas state sales and use taxes providers and their subsidiaries paid on qualifying purchases Sept. 1, 2013, through Dec. 31, 2013.

Beginning in 2015, and thereafter, providers and their subsidiaries can submit refund requests annually for Texas state sales and use tax paid on qualifying purchases during the entire preceding calendar year.

A provider or its subsidiary claiming the sales and use tax refund under this program cannot claim special property tax benefits for economic development on that same tangible personal property under Tax Code Chapter 313, Subchapter B.

The Refund Request Process

Who Can Apply for the Refund?

Providers of cable television, Internet access or telecommunications services can request a refund of Texas state sales and use tax paid on qualifying purchases.

Subsidiaries of a provider of cable television, Internet access or telecommunications services can also request a refund of Texas state sales and use tax paid on qualifying purchases. The subsidiary must identify the associated provider on the refund request.

A subsidiary of a provider is a subsidiary, as defined in Texas Business Organizations Code, Section 1.002(85), for which a cable television provider, Internet access provider, or telecommunications provider is the parent, as that term is defined in Texas Business Organizations Code, Section 1.002(65).

How to Apply for the Refund

Providers and subsidiaries requesting a refund must submit all required information to the Comptroller. The Comptroller can request additional documentation during the verification process and will deny refunds if all required and supporting documentation is not provided.

Electronic Claim Submission

  • Providers and subsidiaries should file refund claims electronically, using our online system.
  • For assistance requesting a refund through our online system, contact us at 1-844-519-5671 or citrus.help@cpa.state.tx.us.

Requests must be in comma-delimited (CSV) format. Below is an example of an approved CSV file. The file must include exactly the fields shown, in exactly the order shown. Do not include any blank lines, totals or subtotals. When all data has been entered, delete the header row, and save the file to your computer as a CSV (Comma Delimited) file. Taxpayers can only have one active submission on file at a time. Subsequent submissions will replace the previous file.

Sample of Approved CSV File

Paper Claim Submission

Providers and subsidiaries can request a waiver from electronic filing if they cannot file electronically. Waiver requests must be submitted at least 30 days before the refund claim deadline and must include a detailed written explanation of the provider’s inability to file electronically.

Data Required to Request Refund

Providers and subsidiaries must provide the information listed below for each item for which they are requesting a refund:

Vendor Name
Format: Text
Field length: 50
Field description/instructions: Input vendor (seller) name from the invoice.
Taxpayer Number Who Paid Tax to State
Format: Numeric
Field length: 11
Field description/instructions:
  • Enter the 11-digit Texas sales and use tax number under which the tax for this transaction was reported.
  • If tax was paid to or refunded by a vendor, enter the vendor's sales and use tax number.
  • If tax was accrued and remitted on your return(s) or assessed by the Comptroller, enter your sales and use tax number.
  • All entries must be exactly 11 numeric digits.
How Paid
Format: Text
Field length: 15
Field description/instructions:

Describe how the tax was paid.

  • Enter “assessed” if the tax was assessed by the Comptroller.
  • Enter “accrued” if the tax was accrued and remitted on your sales tax return.
  • Enter “paid to vendor” if the tax was invoiced by and paid to a vendor (seller).
  • Enter “refunded” if the tax has been refunded to you.
Invoice Number
Format: Text
Field length: 30
Field description/instructions: Enter the invoice number exactly as it appears on the invoice.
Invoice Date
Format: Date
Field length: mm/dd/yyyy
Field description/instructions: Enter the invoice date in mm/dd/yyyy format.
Item Description
Format: Text
Field length: 50
Field description/instructions: Provide a simple description of the item(s) purchased. Do not list a part number or inventory number. This field is limited to 50 characters. Additional information, if needed, may be requested by the Comptroller.
Payment Date
Format: Date
Field length: mm/dd/yyyy
Field description/instructions: Enter the date the tax was paid in mm/dd/yyyy format. This date must be during a valid period for this refund request.
Amount Subject to Tax
Format: Numeric
Field length: 12
Field description/instructions: Enter the total dollar amount on which sales or use tax was calculated for qualifying items on this invoice.
Amount of State Tax Refund Requested
Format: Numeric
Field length: 10
Field description/instructions: Enter the amount of state tax (6.25%) paid on qualifying items on this invoice.

General Instructions and Requirements

  • Valid entries are required in each field.
  • Each transaction for which you are requesting a refund must be included in a single file. You will only be allowed to upload one file. Subsequent uploads will overwrite previous uploads.
  • The purchaser on the invoice must be the same as the purchaser filing the refund claim.
  • The Total Taxable Amount on Qualifying Purchases entered on the Rebate Summary page will not be adjusted if it does not match the detailed transactions file received. Any changes to the Total Taxable Amount on Qualifying Purchases must be submitted by the taxpayer requesting the refund claim no later than the refund claim deadline.
  • The Total Sales Tax Rebate Amount Requested on the Rebate Summary page will not change automatically if it does not match the detail transactions file received.
  • Any changes to the Total Sales Tax Rebate Amount Requested must be submitted by the taxpayer requesting the refund claim no later than the refund claim deadline.

Uploading the File

It is recommended you upload your full detail transactions file as early as possible to avoid peak traffic, which may prevent the upload of your file. You must attempt upload of your full detail transactions file no later than Sept. 2, 2014, for qualifying purchases made Sept. 1, 2013, through Dec. 31, 2013.

Refund Claim Deadline

The deadline to file a claim for refund of Texas state sales and use tax is Sept. 2, 2014, for qualifying purchases made Sept. 1, 2013, through Dec. 31, 2013. For subsequent years, the deadline for filing a claim for refund of Texas state sales and use tax paid on qualifying purchases during a calendar year will be March 31, beginning with March 31, 2015. If the due date falls on a Saturday, Sunday or legal holiday, the due date will be the next business day. Providers and subsidiaries should submit only one claim per period that covers all Texas state sales and use tax paid on qualifying purchases during the claim period.

  • Late refund claims will not be accepted.
  • For qualifying purchases made Sept. 1, 2013, through Dec. 31, 2013, timely requests are:
    • claims electronically submitted by 11:59 p.m. CST on Sept. 2, 2014, or
    • claims postmarked by Sept. 2, 2014, if a waiver was granted.
  • All amendments to a refund claim for qualifying purchases made Sept. 1, 2013, through Dec. 31, 2013, must be made on or before Sept. 2, 2014.

Verification

Claims for refund are subject to verification by the Comptroller’s Audit Division. A refund claim will be denied if the Comptroller determines that the taxpayer requesting a refund was not a provider of a qualifying service, or a subsidiary of a qualifying provider, during the calendar year on which the claim is based.

Additionally, the refund amount will be reduced if the Comptroller determines that the request includes items:

  • that are not qualifying purchases;
  • on which no Texas sales or use tax was paid; or
  • without required or supporting documentation.

How the Refund is Calculated

The amount of refund available to each provider or subsidiary for a calendar year depends on whether the $50 million cap is met.

$50 million or less claimed: If the total amount of Texas state sales and use tax claimed on qualifying purchases by all providers and subsidiaries that are eligible for a refund is not more than $50 million for the calendar year, the Comptroller will refund the full amount of Texas state sales and use tax paid on qualifying purchases, as claimed by each provider and subsidiary and verified by the Comptroller.

More than $50 million claimed: If the total amount of Texas state sales and use tax claimed on qualifying purchases by all providers and subsidiaries that are eligible for a refund is more than $50 million for the calendar year, the Comptroller will prorate the amount of refund.

For initial refunds, each provider and subsidiary will be entitled to a pro rata percentage of the amount requested by the provider or subsidiary and verified by the Comptroller. The pro rata percentage will be determined by comparing the $50 million available for refund to the total amount of all claims submitted for refund.

The refund applies to state sales and use tax only and does not apply to local sales and use tax.

Notifications and Refund Payments

The Comptroller’s Audit Division will notify providers and subsidiaries that have submitted a claim of the results of the verification.

If the Comptroller denies a claim, in whole or in part, the provider or subsidiary who submitted that claim will receive a written notice which explains the reason(s) for denial and identifies the amount approved for refund, if any. Providers or subsidiaries who receive a denial notification can appeal the denial by timely requesting a hearing.

$50 million or less claimed: If the total amount of Texas state sales and use tax claimed on qualifying purchases by all providers and subsidiaries that are eligible for a refund is not more than $50 million for the calendar year, the Comptroller will issue initial refund payments equal to the amount of each approved refund claim by Dec. 31, 2014, for refund claims due Sept. 2, 2014, or by Aug. 31 for refund claims due by March 31 in subsequent years. The Comptroller will refund any additional approved amounts at the successful conclusion of all appeals through the administrative hearings process and state courts.

More than $50 million claimed: If the total amount of Texas state sales and use tax claimed on qualifying purchases by all providers and subsidiaries that are eligible for a refund is more than $50 million for the calendar year, the Comptroller will issue initial refund payments by Dec. 31, 2014, for refund claims due Sept. 2, 2014, or by Aug. 31 for refund claims due by March 31 in subsequent years. The Comptroller will issue any additional refund payments at the conclusion of all appeals through the administrative hearings process and state courts.

Hearing Requests

Providers or subsidiaries who receive a denial can request a hearing by submitting a letter with a statement of grounds within 30 days from the date printed on the denial notice. The postmark date, or its equivalent, on a request for hearing will constitute the filing date. Hearing requests that are not timely filed will not be considered. See Rule 1.5.

Additional Refund Payments

If the total amount of Texas state sales and use tax claimed on qualifying purchases for a calendar year by all providers and subsidiaries that were eligible for a refund is more than $50 million, then upon the conclusion of all appeals through the administrative hearings process and state courts, the Comptroller will recalculate the total approved refund amount and each provider and subsidiary’s pro rata percentage of that amount. The Comptroller will issue an additional, final refund payment for that calendar year to eligible providers or subsidiaries.

If the approved refund claims exceed the $50 million cap for a calendar year, the entire $50 million allocated for the refund program for that calendar year will be paid out to qualifying providers or subsidiaries. The state will not retain any portion of the fund as the result of a denial of any claims.


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