PART 1. COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 1. CENTRAL ADMINISTRATION
SUBCHAPTER A. PRACTICE AND PROCEDURES
DIVISION 1. PRACTICE AND PROCEDURES
The Comptroller of Public Accounts proposes amendments to §1.6, concerning service of documents on parties. The amendments update the mailing address of the Administrative Hearings Section, which has moved to Suite 14.301 of the George H.W. Bush Building at 1801 Congress Ave., Austin, Texas 78701.
Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.
Mr. Reynolds also has determined that the proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. The proposed amended rule would benefit the public by conforming the rule to current statute. There would be no significant anticipated economic cost to the public. The proposed amended rule would have no significant fiscal impact on small businesses or rural communities.
You may submit comments on the proposal to James D. Arbogast, General Counsel for Hearings and Tax Litigation, P.O. Box 13528, Austin, Texas 78711-3528, or james.arbogast@cpa.texas.gov. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.
The amendments are proposed under Tax Code, §111.002 (Comptroller's Rules, Compliance, Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2 (State Taxation).
This section implements Tax Code, §111.00455 (Contested Cases Conducted by State Office of Administrative Hearings).
§1.6.Service of Documents on Parties.
(a) Service required. A party filing a contested case document shall also serve a copy on each party in accordance with §1.3 of this title (relating to Representation and Participation). When SOAH has jurisdiction, a party shall follow the SOAH Rules of Procedure. A party filing a document that is required to be served must include a certificate of service as described in this section. The sender has the burden of proving the date and time of service of a document.
(b) Methods of service. Service generally means sending or delivering a contested case document in order to charge a party with receipt of it and subject a party to its legal effect. Service may be made by the following methods:
(1) hand-delivery;
(2) regular (United States Postal Service or private mail service), certified, or registered mail;
(3) email, upon agreement of the parties; or
(4) if sent by a taxpayer or representative, fax.
(c) Service on interested parties. Interested parties admitted to a contested case pursuant to §1.24 of this title (relating to Interested Parties) shall also be served.
(d) Service on the AHS. Service on the AHS must be through the assigned Tax Hearings Attorney in the AHS. Service may be made as provided in paragraphs (1) and (2) of this subsection.
(1) Hand-delivery. The file stamp affixed by the AHS
will be the date of service for hand-delivered documents. Hand-delivered
documents must be addressed to Texas Comptroller of Public Accounts,
Administrative Hearings Section, 1800 Congress Avenue, Suite
14.301, Austin, Texas 78701-1320 [1700 N. Congress Avenue,
Suite 320, Austin, Texas 78701-1436].
(2) Delivery by methods other than hand-delivery. The service date of a document filed by mail is determined by the date-stamp affixed by the comptroller's mail room. Documents served by fax or email are considered served on a date when they are received at any time during the 24-hour period from 12:00 a.m. (midnight) through 11:59 p.m. on that date, and documents received on a day on which the agency is closed are considered filed on the next calendar day on which the agency is open.
(e) Certificate of service. A party filing a document that must be served shall include a signed certificate of service with the filed document that certifies compliance with this section. A form for a certificate of service shall be sufficient if it substantially complies with the following example: "Certificate of Service: I certify that on (date), a true and correct copy of this (name of document) has been sent to (name of taxpayer's designated representative for notice or assigned Tax Hearings Attorney) by (specify method of delivery and delivery address). (Signature)."
(f) Service of notice of hearing. Unless otherwise required by law, service of notice of hearing shall be made in the manner required by Government Code, Chapter 2001.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 22, 2024.
TRD-202403209
Jenny Burleson
Director, Tax Policy
Comptroller of Public Accounts
Earliest possible date of adoption: September 1, 2024
For further information, please call: (512) 475-2220
The Comptroller of Public Accounts proposes amendments to §1.10, concerning requesting a hearing. The amendments update the mailing addresses for the Audit Division and the Administrative Hearings Section, both of which moved to the George H.W. Bush Building at 1801 Congress Ave., Austin, Texas 78701.
Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.
Mr. Reynolds also has determined that the proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. The proposed amended rule would benefit the public by conforming the rule to current statute. There would be no significant anticipated economic cost to the public. The proposed amended rule would have no significant fiscal impact on small businesses or rural communities.
You may submit comments on the proposal to James D. Arbogast, General Counsel for Hearings and Tax Litigation, P.O. Box 13528, Austin, Texas 78711-3528, or james.arbogast@cpa.texas.gov. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.
The amendments are proposed under Tax Code, §111.002 (Comptroller's Rules, Compliance, Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2 (State Taxation).
This section implements Tax Code, §111.00455 (Contested Cases Conducted by State Office of Administrative Hearings).
§1.10.Requesting a Hearing.
(a) Requesting a redetermination hearing.
(1) If a taxpayer disagrees with a deficiency or jeopardy determination, the taxpayer may request a redetermination hearing by timely submitting a written request for redetermination. This written request must include a Statement of Grounds that complies with the requirements set forth by §1.11 of this title (relating to Statement of Grounds; Preliminary Conference).
(2) The request for a redetermination hearing must be submitted before the expiration of 60 days after the date the notice of determination is issued, or before the expiration of 20 days after the statement date on the notification of a jeopardy determination. A request for a redetermination hearing that is not timely submitted will not be granted. An extension of time for initiating a redetermination hearing may be requested subject to the requirements of subsection (c) of this section. A taxpayer who cannot obtain a redetermination hearing may pay the determination and request a refund in order to raise any objection to the determination.
(3) The request for redetermination and Statement of Grounds must be timely submitted to the agency's Audit Processing Section by one of the following methods:
(A) by regular (United States Postal Service or private
mail service), certified, or registered mail, or by hand-delivery,
to the following address: Texas Comptroller of Public Accounts, Audit
Processing Section, 1801 Congress Avenue, Suite 14.300, Austin,
Texas 78701-1320 [111 E. 17th Street, Austin, Texas 78774-0100];
(B) by email to audit.processing@cpa.texas.gov; or
(C) by fax to (512) 463-2274.
(4) Required documentary evidence following request for redetermination hearing. After a taxpayer timely requests a redetermination hearing, the agency may request in writing that the taxpayer produce documentary evidence for inspection that would support the taxpayer's Statement of Grounds. The written request may specify that resale or exemption certificates to support tax-free sales must be submitted within 90 days from the date of the request, or by the date agreed to by the comptroller and the seller. Pursuant to Tax Code, §151.054 and §151.104, resale or exemption certificates that are not submitted within the time limit will not be accepted as evidence to support a claim of tax-free sales by the ALJ in SOAH proceedings.
(b) Requesting a refund hearing.
(1) If a taxpayer disagrees with the agency's denial of a refund claim, the taxpayer may request a refund hearing by timely submitting to the agency a written request for a refund hearing. This written request must include a Statement of Grounds that complies with the requirements set forth by §1.11 of this title and Tax Code, §111.104 and §111.105.
(2) The request for a refund hearing must be filed on or before the 60th day after the date the comptroller issues a letter denying the claim for refund. A request for a refund hearing that is not timely submitted will not be granted. An extension of time for initiating a refund hearing may be requested subject to the requirements of subsection (c) of this section.
(3) The request for a refund hearing and Statement of Grounds must be timely submitted to the agency's Audit Processing Section by one of the following methods:
(A) by regular (United States Postal Service or private
mail service), certified, or registered mail, or by hand-delivery,
to the following address: Texas Comptroller of Public Accounts, Audit
Processing Section, 1801 Congress Avenue, Suite 14.300, Austin,
Texas 78701-1320 [111 E. 17th Street, Austin, Texas 78774-0100];
(B) by email to audit.processing@cpa.texas.gov; or
(C) by fax to (512) 463-2274.
(4) A refund hearing will not be granted if neither the original request for a refund, nor the Statement of Grounds accompanying a request for a refund hearing, state grounds on which a refund may be granted.
(5) A taxpayer may not subsequently maintain a suit for refund if a refund claim is denied and the taxpayer does not timely request a hearing. See Tax Code, §111.104 and §112.151.
(c) Timely submission of the hearing request.
(1) A hearing request submitted by mail is considered submitted by the date-stamp affixed by the agency mail room.
(2) A hearing request submitted by hand-delivery is considered submitted on the date received by agency staff.
(3) A hearing request that is submitted electronically is considered submitted on a date when it is received at any time during the 24-hour period from 12:00 a.m. (midnight) through 11:59 p.m. on that date, and a hearing request received on a day the agency is closed is considered filed on the next calendar day on which the agency is open. The date of receipt shall be determined by the time and date stamp recorded on the electronic transmission by the agency's system.
(d) Extensions of time for initiating hearing process. Requests to extend the due date for requesting a hearing under this section may be granted in case of emergency or extraordinary circumstances. Requests for extension will not be routinely granted. Requests received after the expiration of the original due date will not be considered. Requests will be granted or denied by the General Counsel of the Hearings and Tax Litigation Division of the agency, and must be submitted by one of the following methods:
(1) by regular (United States Postal Service or private
mail service), certified, or registered mail, or by hand-delivery,
to the following address: Texas Comptroller of Public Accounts, Administrative
Hearings Section, 1801 Congress Avenue, Suite 14.301, Austin,
Texas 78701-1320 [1700 N. Congress Ave., Suite 320, Austin,
Texas 78701-1436];
(2) by email to ahs.service@cpa.texas.gov; or
(3) by fax to (512) 463-4617.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 22, 2024.
TRD-202403210
Jenny Burleson
Director, Tax Policy
Comptroller of Public Accounts
Earliest possible date of adoption: September 1, 2024
For further information, please call: (512) 475-2220
The Comptroller of Public Accounts proposes amendments to §1.35, concerning motion for rehearing. The amendments implement Senate Bill 903, 87th Legislature, 2021 and House Bill 2080, 87th Legislature, 2021.
Subsection (a) is amended to implement Senate Bill 903, which enacted Tax Code, §111.106 (Tax Refund: Notice of Intent to Bypass Hearing). Effective September 1, 2021, a taxpayer who files a notice of intent to bypass the refund hearing, and who either participates in a conference with a designated comptroller employee or is excused from participation in such a conference by the comptroller, may file suit in district court. The last sentence in subsection (a), providing that a motion for rehearing is a prerequisite for a tax refund lawsuit, is therefore an incomplete statement of the law and is deleted.
Subsection (b) is amended to implement House Bill 2080, which enacted Tax Code, Chapter 112, Subchapter E, (Suit After Redetermination). New paragraph (3) references Tax Code, §112.201(a) and states that a motion for rehearing of a redetermination must identify the disputed amounts associated with the grounds of error raised. Current paragraph (3) is renumbered as paragraph (4) and non-substantive changes are made to mirror the syntax of the new subsection.
Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.
Mr. Reynolds also has determined that the proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. The proposed amended rule would benefit the public by conforming the rule to current statute. There would be no significant anticipated economic cost to the public. The proposed amended rule would have no significant fiscal impact on small businesses or rural communities.
You may submit comments on the proposal to James D. Arbogast, General Counsel for Hearings and Tax Litigation, P.O. Box 13528, Austin, Texas 78711-3528, or james.arbogast@cpa.texas.gov. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.
The amendments are proposed under Tax Code, §111.002 (Comptroller's Rules, Compliance, Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2 (State Taxation).
This section implements Tax Code, §111.106 (Tax Refund: Notice of Intent to Bypass Hearing) and Tax Code, §112.201 (Suit After Redetermination).
§1.35.Motion for Rehearing.
(a) Definition. A motion for rehearing is a request
to the comptroller from a party in a contested case to reconsider
part or all of a decision or order. The motion may or may not result
in an additional hearing. [A motion for rehearing is a prerequisite
for a tax refund lawsuit.]
(b) Contents of a motion for rehearing.
(1) Government Code, §2001.146(g) provides that a motion for rehearing must identify with particularity findings of fact or conclusions of law that are the subject of the complaint and any evidentiary or legal ruling claimed to be erroneous.
(2) Government Code, §2001.146(g) further provides that a motion for rehearing must also state the legal and factual basis for the claimed error.
(3) Tax Code, §112.201(a) requires a motion for rehearing of a redetermination to identify the disputed amounts associated with the grounds of error raised.
(4) [(3)] Tax Code, §111.105(d) requires [further provides that] a motion for rehearing
on a tax refund claim to [must] assert each
specific ground of error and state the amount of the refund sought.
(c) Deadline to file a motion for rehearing. A motion for rehearing must be filed no later than 25 days after the comptroller's decision is signed. The comptroller will state the 25-day deadline to file a motion for rehearing on the first page of the comptroller's decision. For contested case purposes, the comptroller will consider a motion for rehearing timely if it is filed by the motion for rehearing deadline stated on the comptroller's decision.
(d) Additional time to file a motion for rehearing.
(1) Motion for extension of time. A motion to extend the time to file a motion for rehearing or reply must be filed with the Office of Special Counsel for Tax Hearings in accordance with §1.5 of this title (relating to Filing Documents with SOAH or the Office of Special Counsel for Tax Hearings) no later than five days after the deadline to file the motion or reply. Government Code, §2001.146(e) gives the comptroller the authority to act on the motion not later than the 10th day after the original deadline. If a motion is timely and properly filed, the comptroller shall issue an order granting or denying the motion. If the comptroller has not timely acted on the motion, the motion is considered overruled.
(2) Failure to receive notice. Government Code, §2001.142 establishes a procedure to revise the motion for rehearing period if a party did not receive notice or acquire actual knowledge of a signed decision before the 15th day after the date the decision is signed. A party may file a sworn motion to revise the period for filing a motion for rehearing. The motion must be filed with the Office of Special Counsel for Tax Hearings in accordance with §1.5 of this title. If the comptroller does not issue an order granting or denying the motion by the 10th day after the motion is received, the motion is considered granted by operation of law.
(e) Calculation of due dates. Refer to §1.4 of this title (relating to Computation of Time) for guidance related to the calculation of due dates.
(f) Determining the date that a document is filed. Refer to §1.5 of this title for guidance related to determining the date a document is filed.
(g) Filing information for the Office of Special Counsel for Tax Hearings. The motions and replies described in this section must be filed with the Office of Special Counsel for Tax Hearings, in accordance with the requirements set out in §1.5 of this title.
(h) Requirement to serve other parties. A copy of the motion or reply must be sent to other parties on the same date the motion or reply is filed with the Office of Special Counsel for Tax Hearings. Refer to §1.6 of this title (relating to Service of Documents on Parties) for additional guidance.
(i) Reply to a motion for rehearing. A party may file a reply to a motion for rehearing, but a reply is not required. The reply must be filed no later than the 40th day after the date the decision is signed.
(j) Action on a motion for rehearing.
(1) The comptroller is not required to act on a motion for rehearing. If the comptroller does not timely act to grant the motion for rehearing, the motion for rehearing is overruled by operation of law the 55th day after the decision was signed. If the comptroller grants an extension to file a motion for rehearing and does not timely act to grant the motion for rehearing, the motion for rehearing is overruled by operation of law the 100th day after the decision was signed.
(2) If the comptroller acts on a motion for rehearing, the comptroller will send a written order granting or denying a rehearing to each party's designated representative for notice. An order granting a motion for rehearing may or may not include the comptroller's decision upon rehearing.
(k) Finality. If a motion for rehearing is overruled, whether by order or operation of law, the comptroller's decision is final on the date the motion is overruled.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 22, 2024.
TRD-202403211
Jenny Burleson
Director, Tax Policy
Comptroller of Public Accounts
Earliest possible date of adoption: September 1, 2024
For further information, please call: (512) 475-2220