Some 501(c)(3) organizations, especially those who applied for sales tax exemption during 2020, may have paid sales taxes for 2020 while their application for exempt status was processed. The IRS can take between 3-6 months to process and certify a 501(c)(3) sales tax exemption, and individual states such as Florida may take even longer. Furthermore, in a year where paper filings became obsolete and department employees worked from their homes, it is likely that turnaround times were even longer than the norm. So, what needs to be done to ensure that your Florida 501(c)(3) organization receives a refund for sales taxes overpaid? Section 215.26. of Florida Statutes Annotated provides that the Chief Financial Officer of the State Treasury may refund overpaid taxes following the submission of an application for refund.
Applications for refunds for overpaid taxes in Florida must be filed with the Chief Financial Officer within three years of the right to refund accruing. For Florida 501(c)(3) organizations filing applications for refund of tax, the form application is called DR-26. The DR-26 form is separated into six parts. Part 1 deals with general information including name, address, and contact numbers of your organization. Part 2 is an electronic signature of the applicant or authorized individual filing on your behalf. Part 3 is where you enter the amount of refund requested. Part 4 is where you provide the identification number of the organization. Part 5 is where you provide the date the tax was paid or the collection period on the tax return used to report the tax. Finally, Part 6 is where you can explain your refund claim. All applications for refund must contain: a detailed explanation of how the refund amount was computed, the specific reasons for the refund request, the dates the overpayment or payment in error occurred, and sufficient information and documentation for the Department to determine eligibility for the refund and the amount of the refund due.
For sales and use tax overpayment in Florida, you must also file a DR-26S form. For exempt sales you overpaid on, you must provide the following: a copy of the sales and use return on which the tax was paid on an exempt sale, a summary of each invoice claimed with the amount of sales tax paid and the amount to be refunded, a copy of the accounting records substantiating the amount of tax reported and paid on the sales and use tax return, a copy of the documentation required to exempt the sale (exemption certificate, direct authority from Department, etc.), a copy of the evidence that sales tax was collected and subsequently refunded to the customer, and a copy of the accounting records showing that any tax refunded or credited to the customer did not reduce the amount of tax reported and paid to the Department on a subsequent return.
Following submission of your refund application, a confirmation page will provide you with your confirmation number. Make sure to mark down your confirmation number. Florida’s Department of Revenue should notify you within thirty days for any further documentation that is required for your claim. You may apply online, by mailing your application to the Florida Department of Revenue’s Refund Process at PO Box 6490, Tallahassee, FL 32314-6490, or by fax to 850-410-2526. If your application is denied or you disagree with adjustments made to your claim, you have the ability to file a protest petition to the Department. You can check the status of your application online at https://taxapps.floridarevenue.com/Refunds/RefundCheckStatus.aspx.
Disclaimer
This blog post is presented for informational purposes only. As always, consult a licensed
attorney for specific, detailed advice about what activities are or are not allowed under the law. For further information, please feel free to set up a consultation for your 501(c)(3) at our
website. We look forward to helping your organization!
Sources:
[1] Fl. Stat. Ann. 215.26
[2]https://taxapps.floridarevenue.com/Refunds/Default.aspx
[3]https://floridarevenue.com/taxes/compliance/Pages/refunds.aspx