New to auditing and hit a wall. Found a manufacturing client in Tampa paying sales tax they should be exempt from. Filed the exemption certificate with TECO Energy and asked for a refund of overpaid tax going back 3 years. TECO says they will apply the exemption going forward but for past taxes paid, the client needs to file a refund claim directly with the Florida Department of Revenue using Form DR-26S. Is this normal? I thought the utility would just credit the account.
Tax refund claim denied — utility says file with Dept of Revenue instead
Totally normal in Florida. The utility collects the sales tax on behalf of the state and remits it to the DOR. Once they have remitted it, they cannot refund it — only the DOR can. So you file the exemption certificate with TECO to stop future charges, and then file the DR-26S with the DOR for the refund of past taxes. The DOR process takes 3-6 months typically. I have done about 20 of these in Florida and they almost always get approved as long as you have the documentation.
Texas works the same way. You file the exemption certificate with the utility going forward, and then file a refund claim with the Texas Comptroller for past taxes using Form 00-985. The Comptroller usually processes these in 60-90 days. Some states let the utility handle the refund directly and some require you to go to the taxing authority. You need to know which process applies in your state.
This is incredibly helpful. Filed the DR-26S last month and just got confirmation from the DOR that it is being processed. Rosemary you were right — they said 3-6 months. Client is happy we are at least not paying tax going forward while we wait for the refund. Thanks everyone.