Texas Comptroller of Public Accounts    STAR System


9907606L



July 29, 1999


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Dear ************:

Thank you for your letter concerning whether COMPANY A can retroactively issue 
a direct payment exemption certificate for previous sales in which your company 
has already collected and remitted the sale tax to the State of Texas.

A direct pay permit holder, such as COMPANY A, has an election to make when it 
purchases taxable items for its own use.  The direct payment exemption 
certificate can be issued to the supplier or applicable taxes can be paid 
directly to the supplier.  Once tax is paid to the supplier, the direct pay 
permit holder may not retroactively go back and give a direct payment exemption 
certificate in order to get a refund of all the tax on the basis of being a 
direct pay permit holder.

The suggested option of COMPANY A giving a direct payment exemption 
certificate, getting a refund of all the tax, and then accruing and paying the 
appropriate taxes directly to the State of Texas is not possible.  COMPANY A 
will need to request a refund from COMPANY B of any tax it paid in error on 
exempt items.  In turn, COMPANY B can get a refund from the State of Texas in 
accordance with Rule 3.325(b). 

This opinion is based on the facts you submitted.  Other facts, though similar, 
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030.  The direct line is 
512/475-0030.  You may also write to Tax Policy, Comptroller of Public 
Accounts.

Sincerely,



David Somerville
Tax Policy Division


cc: Vicki Taylor, ************ Audit


ACCESSION NUMBER: 9907606L  
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 07/29/1999
TAX TYPE: SALES