A step-by-step guide to Statement of Grounds, redetermination, hearings, and refund paths after a Texas Comptroller sales tax audit.
If you disagree with a Texas sales tax audit result, the most effective time to act is before the determination becomes final. Texas provides multiple pathways to resolve disputes, but the process is both deadline-driven and evidence-driven.
Texas audit guidance indicates that taxpayers may request a reconciliation conference or an independent audit review (IAR) conference before final results are issued. After those internal review options are exhausted, a formal notification of results is mailed.
Once the Audit Notification is issued, a Statement of Grounds outlining disputed items must be received by the stated deadline to contest the assessment without payment.
This guide explains how to appeal Texas audit results in a practical and organized way.
Your appeal options start before the Audit Notification arrives
Many taxpayers assume the appeal process begins after the assessment is issued. In Texas, dispute opportunities begin earlier—before the audit is finalized.
Texas audit guidance outlines several steps during and after fieldwork that allow you to address issues proactively:
- After fieldwork, the auditor provides schedules and allows time to dispute proposed adjustments
- You may request a reconciliation conference with the audit manager or supervisor
- If issues remain, you may request an Independent Audit Review (IAR) conference with a neutral third party
What to do at this stage: Treat this phase as your first opportunity to appeal. Submit missing documentation, correct mapping or classification errors, and address disputed items with concise explanations tied to supporting exhibits.
The more issues you resolve at this stage, the fewer you will need to contest later under stricter deadlines.
Statement of Grounds: the document that preserves your right to contest without paying
After the audit is reviewed, Texas issues a formal notification of results. If you disagree with the outcome, the next step is critical.
To contest an assessment without payment, a Statement of Grounds outlining the disputed items must be received by the deadline stated in the Audit Notification. Missing this deadline will generally result in the assessment becoming final and your right to contest being forfeited.
Texas also provides specific rules for determining whether your submission is timely:
- Mail: considered timely if the agency mail room date stamp is on or before the expiration date
- Hand delivery: considered timely if received by staff on or before the expiration date
- Electronic submission: considered timely if received on or before the expiration date based on the system time stamp
What a strong Statement of Grounds looks like
A strong Statement of Grounds is not a general disagreement—it is a structured, issue-based document supported by evidence.
An effective Statement of Grounds typically includes:
- A clear list of disputed issues (e.g., exemptions, resale, use tax, local tax, sampling)
- The specific periods or audit schedules affected
- A concise explanation for each issue
- References to supporting documents (exhibits)
Texas procedures also allow the Comptroller to request additional documentation and impose deadlines for submitting evidence. In certain cases, resale or exemption certificates must be provided within a specified timeframe, and late submissions may not be accepted in later proceedings.
The key is preparation: organize your issues and supporting documents early so your submission is complete and defensible within the required timelines.
You can create a free account with Sales Tax Helper to help you structure a Statement of Grounds that is organized, issue-based, and exhibit-ready so you preserve your rights and avoid last-minute deadline risk.
Petition for redetermination: the 60-day deadline you cannot miss
A Texas audit dispute may move into a formal ‘redetermination’ phase.
Texas law provides that a taxpayer with a direct interest in a determination may petition for redetermination, and the petition must be filed within 60 days after the notice of determination is issued. If the petition is not filed within that period, the determination becomes final and the administrative protest rights are generally lost.
Why this matters
Missing the 60-day deadline can significantly limit your options, often requiring payment first before pursuing refund relief. Even if discussions with the auditor are ongoing, the 60-day deadline should be tracked and treated as fixed; do not assume informal negotiations will extend it.
Filing and procedure basics
Texas applies specific filing rules for contested matters, including requirements for how and when documents must be submitted. Filing dates and procedural compliance can affect whether your petition is accepted, so accuracy and timeliness are critical.
Hearings and evidence: protect your case by treating documentation as the main argument
Texas audit disputes are evidence-driven. Your strongest positions are those supported by documentation tied to specific transactions and late evidence may be excluded from consideration.
Texas procedures allow the Comptroller to request additional documentation and impose deadlines for submission. As noted above, resale or exemption certificates must be provided within a specified timeframe, and late submissions may not be accepted in later proceedings.
Practical evidence checklist for Texas sales tax disputes
- Issue-by-issue narrative (3–6 concise sentences per issue)
- Transaction list (invoice number, date, amount, tax treatment)
- Exhibit binder (certificates, invoices, shipping documentation, general ledger extracts)
- Reconciliation schedules (POS to general ledger to filed returns)
- Sampling support (population definition and documentation of non-representative periods, if sampling is disputed)
When preparing for a Texas hearing, the goal is to present a structured, evidence-backed file that aligns with how issues are evaluated.
By creating a free account with Sales Tax Helper, you can organize a complete evidence package that supports your positions and reduces the risk of exclusion or misinterpretation.
Refund route: hearing request or “bypass hearing” within 60 days of denial
If your dispute is in a refund posture, Texas provides specific options and deadlines.
If a refund is denied or partially denied, the claimant has two options: file a refund hearing request or submit a notice of intent to bypass hearing. Both must be filed within 60 days of the denial.
Texas explains that a refund hearing request requires a letter with a statement of grounds, submitted within 60 days of the denial date. The filing date is generally based on the postmark or equivalent. Texas also explains that if a refund hearing is requested timely, the Comptroller can issue a written demand for evidence, and evidence must be submitted within required timeframes or it may not be considered.
Texas Tax Code §111.106 also describes the Notice of Intent to Bypass Hearing, including that it must be filed on or before the 60th day after the denial letter, must assert material facts and legal bases, and must specify the amount claimed.
After the decision: motions for rehearing and deadlines
If your dispute proceeds through a contested case and you receive a Comptroller decision, Texas provides a motion-for-rehearing process.
Texas Comptroller guidance explains how to calculate the deadline and where to file a motion for rehearing (through the Office of Special Counsel for Tax Hearings), and describes how filing by email/fax or mail is treated for “filed” timing. Texas administrative rule §1.35 sets the deadline at 25 days after the Comptroller's decision is signed, with additional rules governing how filing by mail, email, or fax is treated for timing purposes.
This matters because motions for rehearing can be a required step before certain court options, and missing the deadline can make the decision final.
How To Protect Yourself
To appeal a Texas sales tax audit effectively and on time, focus on the following:
- Lock your deadline calendar immediately: track the Audit Notification deadline for the Statement of Grounds, the 60-day redetermination period, and any refund denial deadlines
- Convert disagreements into issue files: create one folder per issue with supporting transaction lists and exhibits
- Submit key documentation early: especially exemption and resale support, as late certificates may be excluded under Texas procedural rules
- Use conferences strategically: reconciliation conferences and Independent Audit Reviews (IAR) may help resolve issues before the formal process advances
- Prepare a clear Statement of Grounds: keep it concise, organized, and directly tied to supporting evidence
FAQ
How do I appeal Texas sales tax audit results without paying first?
Texas guidance states a mailed Statement of Grounds outlining disputed items must be received by the deadline on the Audit Notification to contest the assessment without paying.
How does Texas determine whether my Statement of Grounds is timely?
Texas explains timeliness rules for mailroom date-stamp, hand delivery receipt, and electronic submissions (based on the system time stamp).
What is the deadline to petition for redetermination in Texas?
Texas Tax Code §111.009 requires filing within 60 days after the notice of determination is issued, or the determination becomes final.
Can I submit exemption or resale certificates later during hearings if I forgot them during audit?
Texas Admin Code §1.11 explains the Comptroller may require certificates within 90 days (or an agreed date) and certificates not submitted within that time limit will not be accepted as evidence in SOAH proceedings to support tax-free sales claims.
If my refund claim is denied, what is the deadline to contest?
Texas refund guidance states you can file a refund hearing request or a notice of intent to bypass hearing within 60 days of the denial.
What is a Notice of Intent to Bypass Hearing?
Texas Tax Code §111.106 describes it as a written notice that must be filed within 60 days of a refund denial, stating material facts, legal bases, and the amount claimed.
How long do I have to file a motion for rehearing after a Comptroller decision?
Texas Admin Code §1.35 states the deadline is no later than 25 days after the Comptroller’s decision is signed.
Next Steps
If you need to appeal a Texas sales tax audit, the most effective approach is to act early, track deadlines precisely, and build a dispute package organized by issue and supported by clear exhibits.
By creating a free account with Sales Tax Helper, you can prepare a structured Statement of Grounds, organize your evidence file, and develop a clear redetermination or refund strategy. This helps you move forward with clarity and reduce the risk of an inflated assessment becoming final.