Refund process for vendors
A vendor may seek a refund on behalf of a purchaser. In general, a purchaser seeking a refund of sales or use tax paid in error to a vendor must present a vendor with a resale or exempt use certificate, or other appropriate documentation. The vendor, who is formally the taxpayer in the transaction, may then seek a refund of tax from DOR for the previously reported and paid sales or use tax, with a representation that it has paid or credited, or will pay or credit, the amount of the refunded tax back to the purchaser. Prior to the introduction of MTC in 2015, a vendor filed an application for abatement to obtain a refund of tax. As of November 15, 2015, a vendor no longer files an application for abatement to obtain such refunds. DOR’s current process pursuant to TIR 15-13 now requires a vendor seeking such a refund to use MTC to file an amended return to reduce the self-assessed tax previously reported on its return.
Refund process for purchasers acting on behalf of vendors
Prior to the introduction of MTC in 2015, DOR allowed a purchaser that had secured a power of attorney from a vendor to file an application for abatement on the vendor’s behalf. See e.g., Directive 92-3. Notwithstanding the process explained in TIR 15-13, this TIR clarifies that DOR will continue to allow a purchaser, with the vendor’s express authorization, to file an application for abatement under a power of attorney from the vendor. The purchaser may pursue an abatement claim on the vendor’s behalf by submitting a paper Form ABT, Application for Abatement. DOR will treat this claim as an application for abatement under G.L. c. 62C, § 37. A purchaser seeking a refund on behalf of a vendor must file the application for abatement with a valid power of attorney prior to the expiration of the vendor’s applicable statute of limitations for filing an abatement application. All refunds will be issued to the vendor and are subject to any allowable offset or intercept. See generally, G.L. c. 62C, §§ 36, 37; and 830 CMR 62C.37.1.
In addition to the Form ABT, the submission must contain the following:
- a completed Form M-2848, Power of Attorney and Declaration of Representative, whereby the vendor grants the purchaser (and/or the purchaser’s representative) a limited power of attorney,
- a conditional credit memo for the amount of the refund or other proof that the vendor has repaid or credited, or will repay or credit, the purchaser who has paid the tax to the vendor in the amount for which the application is made, and
- an attachment summarizing the claim, listing the exempt purchases and providing an explanation of the process used to determine that the items were exempt.
For further information on how to file an application for abatement and for copies of DOR forms please go to DOR’s website at http://www.mass.gov/dor/appeals-info/.
/s/Michael J. Heffernan
Michael J. Heffernan
Commissioner of Revenue
December 2, 2016