Sec. 162.228. REFUND FOR BAD DEBTS; CREDIT FOR NONPAYMENT. (a) A licensed distributor may file a refund claim with the comptroller if:

(1) the distributor has paid the taxes imposed by this subchapter on diesel fuel sold on account;

(2) the distributor determines that the account is uncollectible and worthless; and

(3) the account is written off as a bad debt on the accounting books of the distributor.

(b) A licensed supplier or permissive supplier may take a credit on the monthly report to be filed with the comptroller if:

(1) on a previous report, the supplier or permissive supplier paid the taxes imposed by this subchapter on diesel fuel sold on account;

(2) the person to whom the supplier or permissive supplier sold the diesel fuel has not remitted the tax to the supplier or permissive supplier; and

(3) at the time of the transaction, the person to whom the supplier or permissive supplier sold the diesel fuel held a license issued by the comptroller.

(c) The return on which the refund is claimed or the credit is taken must state, if applicable, the license number of the person whose account has been written off as a bad debt, or who failed to remit the tax, and any other information required by the comptroller. The amount of the refund or credit that may be claimed under Subsection (a) or (b) may equal but may not exceed the amount of taxes paid on the diesel fuel to which the written-off account or unpaid taxes apply.

(d) If, after a refund is received under Subsection (a) or a credit is taken under Subsection (b), the account on which the refund or credit was based is paid, or if the comptroller otherwise determines that the refund or credit was not authorized by Subsection (a) or (b), the unpaid taxes shall be paid by the distributor receiving the refund or the supplier or permissive supplier taking the credit, plus a penalty of 10 percent of the amount of the unpaid taxes and interest at the rate provided by Section 111.060 beginning on the day the refund was issued.

(e) This section does not apply to a sale of diesel fuel that is delivered into the fuel supply tank of a motor vehicle or motorboat and for which payment is made through the use and acceptance of a credit card.

(f) A refund under this section must be claimed at the time the account is written off as a bad debt, but may only be claimed before the expiration of the applicable limitation period as provided by Chapter 111.

(g) The comptroller may take action against a person in relation to whom a distributor, supplier, or permissive supplier has made a refund claim or taken a credit for collection of the tax owed and for penalty and interest as provided by Chapter 111.

Added by Acts 2003, 78th Leg., ch. 199, Sec. 1, eff. Jan. 1, 2004.