What the Form Is For
Texas Form 00-985, Assignment of Right to Refund, is an official document issued by the Texas Comptroller of Public Accounts that transfers the right to claim a sales tax refund from the seller who collected the tax to the purchaser who paid it. Think of it as a "permission slip" that allows you, the buyer, to go directly to the state for your refund instead of relying on the seller to handle it.
This form becomes necessary when you've paid sales or use tax in error but you're not the business that actually sent that tax money to the Texas Comptroller's office. The seller collected the tax from you and remitted it to the state, so technically the seller holds the right to request any refund. Form 00-985 formally transfers that right from the seller (called the "assignor") to you, the purchaser (called the "assignee").
The form is most commonly needed when purchasers don't hold a Texas sales and use tax permit at the time of purchase, or when sellers prefer not to process refunds themselves. Once properly completed and signed by both parties, this assignment gives you the legal authority to file a refund claim directly with the Comptroller's office without further involvement from the seller.
When You’d Use Form 00-985
Common Situations
You'll typically need Form 00-985 in several specific situations. The most common scenario occurs when you're a purchaser without a sales tax permit who paid tax on an item that should have been exempt or tax-free. For example, if you bought equipment that qualifies for manufacturing exemptions but were incorrectly charged sales tax, you'd first ask the seller for a refund. If the seller refuses to process the refund or prefers you handle it directly, they must complete Form 00-985 to assign their refund rights to you.
Amended Claims or Past Errors
Another situation arises when filing an amended claim or correcting past purchases. Perhaps you discovered months or years later that multiple purchases were taxed incorrectly. Rather than asking the seller to amend their own returns, the seller can provide you with Form 00-985 for each vendor, allowing you to consolidate all your refund claims in one submission to the Comptroller's office.
Industry-Specific Use
The form is also used by crude oil and natural gas producers for invoices dated before September 1, 2021. While newer legislation allows these severance taxpayers to claim direct refunds without Form 00-985, transactions before that effective date still require the traditional assignment process.
Statute of Limitations Reminder
Importantly, you must obtain and submit Form 00-985 within the four-year statute of limitations period. The clock starts from the date the tax was originally due and payable to the state, not from when you paid the seller. If you wait too long to request the assignment from your seller, you may lose your right to any refund entirely.
Key Rules or Details for 2022
Four-Year Statute of Limitations
The four-year statute of limitations is the most critical rule governing Form 00-985. A valid assignment must reach the Comptroller's office before this deadline expires. The four years run from the date the tax was due and payable to Texas, which is typically when the seller filed the return that included your transaction. Missing this deadline means you forfeit your right to the refund permanently.
One Form Per Vendor
Each vendor requires a separate Form 00-985. If you paid tax in error to five different sellers, you must obtain five separate assignment forms—one signed by each seller.
Required Signatures and Details
Both the assignor (seller) and assignee (purchaser) must sign the form with authorized personnel. The form must include detailed information about the tax payment being assigned, including:
- Specific period
- Transaction details
- Exact refund amount
Must Be Submitted With Claim
Form 00-985 must accompany your refund claim. You’ll still need to complete Form 00-957 or use the online system and attach supporting documentation.
Tolling the Statute
The statute of limitations stops running only when your complete refund claim package arrives with all required elements.
Step-by-Step (High Level)
Step 1: Contact the Seller
Start by contacting the seller and request either:
- A direct refund
- Or Form 00-985
Step 2: Seller Completes Their Section
The seller fills out:
- Business details
- Taxpayer number
- Transaction details
- Refund reason
They must sign and date the form.
Step 3: Purchaser Completes Their Section
You (the assignee) provide:
- Name and contact info
- Refund justification
Then sign and keep a copy.
Step 4: Prepare Refund Claim
Use:
- Online Texas Claim for Refund
- OR Form 00-957
Gather:
- Invoices
- Proof of payment
- Exemption certificates
Step 5: Submit the Full Package
Submit:
- Form 00-985
- Claim form
- Supporting documents
Options:
- Online
Step 6: Respond to Follow-Ups
Respond within 30 days if additional documentation is requested.
Common Mistakes and How to Avoid Them
Waiting Too Long
The biggest mistake is missing the four-year deadline. Always calculate from when the tax was due—not when you discovered the error.
Incomplete Forms
Ensure:
- All fields are filled
- Both signatures are present
- Tax details match records
Missing Documentation
Provide:
- Invoices
- Proof of payment
- Exemption proof
Thinking the Form Is the Claim
Form 00-985 does NOT equal a refund claim. You must still file Form 00-957 or use the online system.
Ignoring Local Taxes
Include all applicable:
- City
- County
- Special district taxes
What Happens After You File
Review Process
The Comptroller reviews:
- Your claim
- Supporting documents
- Matching records
Requests for More Info
You may receive requests and typically have:
- 30 days to respond
Possible Outcomes
Approval
You receive:
- Refund check
- Or direct deposit
Incomplete Claim
You’ll get a notice requesting missing info.
Denial
You have 60 days to:
- Request a hearing
- Or go to district court
Stay Compliant
Continue filing and paying all current taxes while waiting.
FAQs
What’s the difference between the assignor and assignee on Form 00-985?
The assignor is the seller who collected and remitted the tax. The assignee is the purchaser who paid the tax. The form transfers the refund rights from the seller to the buyer.
Can I use one Form 00-985 for multiple sellers?
No. Each seller requires a separate form to ensure proper documentation of assigned refunds.
What if the seller refuses to sign Form 00-985?
They are not required to assign the right. You may need to pursue other legal options if they refuse both refund and assignment.
How do I calculate the four-year deadline?
Count four years from when the tax was due to the state—not the purchase date.
What if I submit Form 00-985 without a claim?
Nothing happens. The assignment alone does not trigger a refund—you must submit a full claim.
Can I submit Form 00-985 electronically?
Yes. The Comptroller accepts electronic submissions and signatures via email or online systems.
Do I need Form 00-985 if I had a sales tax permit?
Not always. Permit holders may use alternative refund methods, but non-permit holders must use this form.
Sources: All information in this guide comes from official Texas Comptroller of Public Accounts publications and web resources, including the Sales Tax Refunds page, Sales Tax Refunds FAQ, and related guidance documents.
