What the Form Is For
Texas Form 00-985, Assignment of Right to Refund, is an official document that allows a purchaser who paid sales tax in error to seek a refund directly from the Texas Comptroller of Public Accounts when they cannot obtain that refund from the seller. Think of it as a "permission slip" that transfers the legal right to claim a tax refund from the seller (who actually collected and remitted the tax to the state) to the purchaser (who paid the tax). This form becomes necessary because the Comptroller's office typically can only refund taxes to the entity that originally submitted those taxes to the state. When a purchaser pays sales tax on a purchase that should have been exempt or otherwise not taxable, they normally would ask the seller for their money back. However, if the seller is unwilling or unable to provide that refund, Form 00-985 enables the purchaser to bypass the seller and file a refund claim directly with the state.
The form establishes two key parties: the assignor (the seller who collected the tax and remitted it to the Comptroller) and the assignee (the customer who paid the sales tax). By completing and signing this form, the assignor formally transfers all rights and interests to the tax refund to the assignee. This document is particularly crucial for purchasers who did not hold a Texas sales and use tax permit at the time of the original purchase, as they have no other avenue to recover taxes paid in error.
When You’d Use This Form
Form 00-985 is specifically required when a purchaser without a sales tax permit at the time of purchase needs to claim a refund for sales tax paid in error. The most common scenarios include situations where a nonprofit organization or other tax-exempt entity purchased items or services but the seller charged sales tax anyway, purchases that qualified for an exemption but tax was collected nonetheless, items bought for resale that were incorrectly taxed, or transactions involving agricultural or timber operations that should have been exempt.
You would file this form along with Form 00-957 (Texas Claim for Refund) when seeking a refund from the Comptroller's office. The process typically begins when you realize you've overpaid sales tax and approach the seller requesting a refund. If the seller refuses to provide a refund or credit, they should provide you with a completed Form 00-985 instead. If you held a sales tax permit at the time of purchase, you have other options available and may not need this form—you could amend your sales tax return or take a credit on a future return. However, purchasers without permits must use this assignment process.
Regarding timing, Form 00-985 must be submitted before the four-year statute of limitations expires. The four-year period begins from the date the tax was originally due and payable to the state. It's essential to understand that filing this form is not the same as filing an amended return—it's part of the original refund claim process when you weren't the party who remitted the tax to the state.
Key Rules or Details for 2017
Several critical rules govern the use of Form 00-985. First and foremost, you must submit a separate Form 00-985 for each vendor from whom you're claiming a refund. If you paid tax in error to five different sellers, you need five separate assignment forms, each properly completed and signed by the respective vendor. This requirement ensures clear documentation of which seller is assigning which refund rights.
The four-year statute of limitations is absolutely critical and inflexible. You must submit your refund claim—including the completed Form 00-985—within four years from the date the tax was originally due and payable. The statute can be extended only under specific circumstances, such as when an Agreement to Extend Period of Limitation is executed during an audit, or when a completed audit extends the filing period. Missing this deadline means losing your right to the refund permanently, regardless of how valid your claim might be.
The form must be signed by authorized personnel from the seller's organization. The Comptroller's office requires proper authorization to ensure the assignment is legitimate and binding. An incomplete or improperly signed form will delay or prevent processing of your refund claim.
When you file Form 00-985, you must also file Form 00-957 (Texas Claim for Refund) simultaneously. The assignment form alone does not constitute a refund claim—it merely establishes your legal right to pursue one. Form 00-957 is where you detail the specific amounts, reasons, and documentation supporting your refund request.
Understanding what "tolling the statute of limitations" means is important. When you submit a complete refund claim with all required elements, the clock stops running on the four-year limit. However, if your claim is incomplete, the statute continues to run until you provide all necessary information. The Comptroller's office will notify you of missing elements, and you typically have 30 days to respond.
Step-by-Step (High Level)
Confirm Eligibility
The process of using Form 00-985 follows a logical sequence that begins well before you actually complete the form itself. First, confirm that you genuinely overpaid sales tax and that the transaction qualifies for a refund under Texas law. Review your purchase documentation, exemption certificates, or other relevant materials to ensure you have a valid claim.
Contact the Seller
Next, contact the seller who charged you the tax and request a refund directly from them. Explain why the tax was charged in error and provide any necessary documentation such as exemption certificates, agricultural registration numbers, or other proof of exempt status. The seller has the option to either refund the tax directly to you or provide you with a completed Form 00-985.
Gather Documentation
Once you receive the signed Form 00-985 from the seller, gather all supporting documentation for your refund claim. This includes:
- Copies of invoices showing the amount of tax paid
- Proof of payment such as receipts or canceled checks
- Exemption certificates or registration numbers
- Detailed explanations of why the tax was paid in error
Complete Required Forms
Complete Form 00-957 (Texas Claim for Refund) along with Form 00-985. On Form 00-957, you'll need to:
- Identify yourself as the claimant
- Specify the tax type and time period
- Detail each transaction with dates and amounts
- Explain the reason for each refund request
- Calculate the total refund amount claimed
Submit the Claim
Submit both forms together to the Comptroller's office:
- Online via web form (with uploads)
- Email to refund.request@cpa.texas.gov
- Mail to Texas Comptroller of Public Accounts
Monitor Your Claim
After filing, monitor your claim’s progress. You can check status via email and must respond within 30 days if additional documentation is requested.
Common Mistakes and How to Avoid Them
Filing One Form for Multiple Vendors
One of the most frequent errors is filing a single Form 00-985 when claiming refunds from multiple vendors. Each seller must sign a separate form.
Missing the Deadline
Many taxpayers miss the four-year statute of limitations. Start early and calculate deadlines correctly.
Incomplete Documentation
Submitting incomplete documentation is another common pitfall. Ensure you include:
- Invoices with tax details
- Proof of payment
- Exemption documentation
- Clear explanations
Improper Signatures
Failing to obtain proper signatures causes delays. Ensure an authorized person signs the form.
Filing Only One Required Form
Some taxpayers confuse Form 00-985 with Form 00-957. These must be filed together—never separately.
What Happens After You File
Once the Comptroller's office receives your claim, they review it for completeness. If all required elements are present—including properly completed Form 00-985 and Form 00-957 with adequate supporting documentation—your claim tolls the statute of limitations.
Review and Verification
The office examines documentation, verifies details with the seller, and reviews eligibility.
Processing Time
- Simple claims: a few weeks
- Complex claims: several months
Possible Outcomes
- Approved → refund issued
- Incomplete → request for more info
- Denied → written explanation provided
If Your Claim Is Denied
You can:
- Request a refund hearing within 60 days
- Proceed to district court
Maintain organized records throughout the process.
FAQs
What’s the difference between an assignor and an assignee on this form?
The assignor is the seller who collected and remitted the tax. The assignee is the purchaser seeking the refund. The form transfers the refund rights from the seller to the buyer.
Can I file this form if I have a sales tax permit?
This form is mainly for those without a permit at the time of purchase. Permit holders typically amend returns or take credits instead.
What if the seller refuses to sign Form 00-985?
Without the seller’s signature, you generally cannot claim a refund directly. You may need to pursue legal options if they refuse.
How long does it take to get my refund after filing?
Simple claims may take weeks, while complex ones can take several months depending on verification requirements.
What happens if I’m near the four-year deadline?
File as soon as possible. Missing the deadline can permanently eliminate your eligibility for a refund.
Can I file Form 00-985 online?
You can submit it digitally by uploading it alongside Form 00-957 via the Comptroller’s online system or email.
Do I need professional help to file this form?
Most people can handle it themselves, but complex claims may benefit from a tax professional.
This guide is based on information from the Texas Comptroller of Public Accounts. For the most current forms and detailed instructions, visit comptroller.texas.gov.
