1. (a) Payments received by the comptroller for application against existing liabilities will be credited toward the period designated by the taxpayer under conditions which are not prejudicial to the interest of the State of Texas. A condition which is considered prejudicial is the imminent expiration of the statute of limitations for a period or periods. Nondesignated payments shall be applied in the order of the oldest liability first, until the payment is exhausted. Crediting of a payment toward a specific liability period will be first against the tax, with any surplus used to pay off penalty and interest unless the comptroller determines that a different order of payment credit should be followed with regard to a particular tax or factual situation.
2. (b) Under circumstances where multiple type tax liabilities exist, such as city and state sales tax, payments will be divided proportionately between the taxes so that each tax shall share the payment on the basis of the amount due each tax.

3. (c) Unjust enrichment.

   1. (1) If amounts are collected as tax in transactions on which tax is not due, the comptroller will require, under the doctrine of unjust enrichment, that these amounts be remitted to the state or be refunded to the customers from whom they were collected.
   2. (2) In the case of refunded amounts, documentary evidence must be retained establishing the transaction, the amount collected, the party from whom collected, the amount refunded, and the party to whom refund is made.

Source Note:The provisions of this §3.2 adopted to be effective January 1, 1976; amended to be effective July 28, 2002, 27 TexReg 6537.