Texas Form 00-985: Assignment of Right to Refund – Complete Guide 2018

What Form 00-985 Is For

Form 00-985, Assignment of Right to Refund, is an official Texas Comptroller document that transfers the right to claim a tax refund from the seller (who collected and remitted the tax) to the purchaser (who paid the tax). This form is specifically required when you, as a purchaser, paid sales tax in error but don't hold a Texas sales and use tax permit.

Why You Need This Form

Here's why you need it: When you buy something and pay sales tax, the seller collects that tax from you and then sends it to the Comptroller's office. Legally, the seller is the one who remitted the tax, so they're normally the only party with the right to request a refund. If you want to claim the refund yourself, the seller must formally assign that right to you using Form 00-985.

How the Assignment Works

The form essentially documents that the seller (called the "assignor" on the form) is giving you (the "assignee") permission to pursue the refund directly with the state, rather than going through the seller. Without this assignment, you would have to rely on the seller to request the refund and then pass the money along to you—a process that can be slow or uncertain.

Applicable Tax Types

Form 00-985 applies to various Texas tax types, including sales and use tax, natural gas production tax, and other taxes where an entity paid tax to a remitter but wasn't the one who sent the funds to the state.

When You’d Use Form 00-985

Common Use Cases

You'll need Form 00-985 in several common situations. The most typical scenario is when you purchase taxable items or services and pay sales tax at the time of purchase, but later discover the transaction qualified for an exemption or shouldn't have been taxed.

For example:

• You might buy manufacturing equipment that's actually exempt from sales tax under Texas law
• You might purchase items that qualify for a sales tax holiday but the seller charged tax anyway

If You Don’t Have a Sales Tax Permit

If you hold a Texas sales tax permit, you have other options—you can file an amended return or take a credit on a future return. But if you don't have a permit, your first step is asking the seller for a refund.

When Sellers Provide the Form

You'd use this form when the seller chooses to provide the assignment instead of processing the refund themselves. This often happens when:

• The seller already remitted the tax
• The seller doesn’t want to handle refund paperwork
• There’s a dispute about taxability

Timing and Deadlines

Timing matters significantly here. You generally have four years from the date the tax was originally due and payable to file a refund claim.

• Form 00-985 must be submitted before this deadline
• You need a separate form for each vendor

Amended Situations

The form also comes into play if:

• A seller files an amended return showing overcollected tax
• The seller can’t refund you directly (e.g., out of business)

Key Rules or Details for 2018

Separate Form Per Vendor

You must obtain a completed and signed Form 00-985 for each vendor. A single form cannot cover multiple vendors.

Authorized Signatures Only

Each form must be signed by an authorized employee responsible for tax matters. Unauthorized signatures can delay your claim.

Four-Year Statute of Limitations

You must file your claim within four years of when the tax was due. Missing this deadline eliminates your refund rights entirely.

Required Supporting Forms

When filing, you must also submit:

• Form 00-957 (Texas Claim for Refund)
• Supporting documentation (invoices, proof of payment, etc.)

Power of Attorney Requirement

If filing on behalf of someone else, include:

• Form 01-137 (Limited Power of Attorney)

Detailed Explanation Requirement

Your claim must clearly explain why the tax was paid in error. Vague statements will not stop the statute of limitations clock.

Step-by-Step (High Level)

Step 1: Identify the Error

Gather:

• Receipts
• Invoices
• Proof of payment

Step 2: Contact the Seller

Request a refund. The seller will either:

• Refund you directly
• Provide Form 00-985

Step 3: Complete Refund Claim Form

Fill out Form 00-957 with:

• Detailed explanation
• Time period
• Total refund amount

Step 4: Gather Documentation

Include:

• Signed Form 00-985 (per vendor)
• Receipts and invoices
• Proof of payment
• Supporting exemption documents

Step 5: Submit Your Claim

You can submit via:

• Online form (2MB limit)
• Email
• Mail

Step 6: Respond to Follow-Ups

Respond within 30 days if additional info is requested.

Common Mistakes and How to Avoid Them

Using One Form for Multiple Vendors

Always get a separate Form 00-985 per vendor.

Unauthorized Signatures

Ensure the signer has legal authority over tax matters.

Missing the Deadline

File before the four-year limit expires—no exceptions.

Vague Explanations

Clearly cite:

• Legal exemptions
• Specific reasons for error

Poor Documentation

Include:

• Invoices
• Proof of payment
• Supporting evidence

Missing Local Jurisdictions

Identify all applicable tax jurisdictions using the Tax Rate Locator.

Using the Wrong Process

If you have a sales tax permit, you don’t need Form 00-985.

What Happens After You File

Initial Review

The Comptroller checks if your claim is complete. A complete claim stops the statute clock.

Verification Process

They may request additional documentation. You must respond within 30 days.

Possible Outcomes

Approval

You receive:

• A refund check
• Or direct deposit (if set up)

Incomplete Claim

You’ll be asked to provide missing details.

Denial

You can:

• Request a refund hearing within 60 days
• Go directly to district court

Hearing Requirements

If requested:

• Submit all evidence within required deadlines
• Late documents cannot be used

Processing Time

• Simple claims: a few months
• Complex claims: longer

FAQs

Why can't I just file a refund claim without Form 00-985?

The legal right to claim a refund belongs to the seller who remitted the tax. Form 00-985 transfers that right to you so the Comptroller can legally issue the refund.

What if the seller refuses to give me Form 00-985?

You may:

• Continue negotiating
• Consider legal action (often impractical for small amounts)

Can I submit one Form 00-985 for multiple transactions?

Yes, but only for one vendor. You still need separate forms per vendor.

What if the seller is out of business?

You may need to:

• Contact a successor company
• Reach out to a bankruptcy trustee
• Document all attempts

How is my refund calculated?

Your refund includes:

• State tax
• All local taxes

Do I need Form 00-985 if I have a permit?

No. You can:

• File an amended return
• Take a credit
• File directly

Can someone file on my behalf?

Yes, with Form 01-137 (Power of Attorney).

Additional Information

For more information and official forms, visit the Texas Comptroller's website or call 800-531-5441.

This guide is based on information from the Texas Comptroller of Public Accounts as of 2018-2026 and is intended for general informational purposes only. Always consult the most current forms and instructions or speak with a tax professional for advice specific to your situation.

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