We constructed some very large and expensive equipment which involved purchasing large quantities of parts (such as motors and bearings). We also purchased steel which was used to build prototypes not for sale. It is my understanding that most if not all of the steel we purchased and a significant amount of the parts should be exempt from state sale tax because it falls under the state sales and use tax exemption. Unfortunately, when we purchased the steel, we paid sales tax on all of it. Is it possible to get a refund for the sales tax paid on the steel even though we have already paid it.

ANSWER

The BIDaWIZ Team's Answer:

Yes, it is possible under Texas State law. Does the business hold a sales and use tax permit? If you do not have a sales and use tax permit, you must first ask the seller for a refund of any tax paid in error. The seller can either grant the refund or give the purchaser an assignment of right to refund, which allows the purchaser to file a refund claim directly with the Comptroller. Please note that a claim for refund must be made within four years from the date on which the tax was due and payable. If you held a sales tax permit at the time sales tax was paid in error, you may amend a sales tax return for the period in which the tax was paid in error, or take a credit on a future sales tax return for taxes paid in error to a permitted seller.