Can a licensed customs broker use a smartphone app to remotely verify a foreign shopper's export tax refund claim instead of meeting the shopper in person?

Plain-English summary

The Texas Comptroller rejected a proposed smartphone app that would let licensed customs brokers verify foreign shoppers' sales tax export refund claims remotely, ruling it does NOT satisfy Texas's export-verification requirements — because the law demands the shopper and broker be physically present with each other, and the app also improperly let a non-broker help prepare the required certification form.

Foreign visitors who buy goods in Texas can get their sales tax refunded when they export the goods, but only through a specific process: a licensed customs broker must verify the export and sign a Comptroller-generated form. The proposed app would let a foreign shopper upload ID, photos of purchased items, receipts, and travel documents; the broker would then review everything remotely, pay the refund (minus a commission), and verify export eligibility electronically — no in-person meeting required. The Comptroller found two independent problems. First, Texas law requires the purchaser and the customs broker (or the broker's authorized employee) to be in each other's physical presence both when signing the export certification form and when performing the required attestation — the app's remote-verification model can't satisfy an in-person requirement no matter how thorough its documentation review is. Second, only a licensed customs broker or their authorized employee may prepare, issue, or sign the export certification form — but the app itself gathers and organizes the very information that goes onto that form, which the Comptroller treated as impermissibly "partially preparing" the form through an unauthorized system rather than the broker directly.

What this means for you

Fintech companies building export-verification, tax-refund, or customs-adjacent technology

Don't assume a thorough electronic documentation/verification workflow can substitute for statutorily required in-person verification — Texas's export tax refund process specifically requires physical presence for both the certification signing and the attestation, a requirement pure remote/app-based systems cannot satisfy as written.

Customs brokers considering technology-assisted verification tools

Software can support your compliance workflow (organizing documents, tracking shopping events, facilitating payment), but be careful that the tool doesn't cross into "preparing" the export certification form itself — only you or your authorized employee may prepare, issue, or sign that form.

Accountants and tax professionals advising retail/export businesses

The controlling framework combines the physical-presence requirement in Section 151.1575(a)(3)(G) and (I) with the broker-exclusivity rule in Section 151.157(g) and 34 Tex. Admin. Code § 3.360(b)(3) — both independently defeat a remote-verification model, so a technology fix would likely require statutory or rule amendment, not just a better app design.

Common questions

Q: Can a customs broker verify a foreign shopper's export refund claim entirely online or through an app?
A: Not under current Texas law, per this ruling — the purchaser and broker must be physically present with each other for both the certification signing and the required attestation.

Q: Can a third-party app help organize documentation for an export refund claim without running afoul of this rule?
A: This ruling suggests caution — even gathering and organizing the elements that go onto the official certification form was treated as impermissible "partial preparation" of that form by someone other than the licensed broker.

Q: Can another export-verification technology company rely on this ruling?
A: No. It's binding on the Comptroller only for the requesting taxpayer and facts presented, and cannot be relied on by any other taxpayer.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.1575(a)(3)(G), (I) (physical-presence and attestation requirements)
• Tex. Tax Code § 151.157(g) (prohibition on authorizing others to prepare export documentation)
• Tex. Tax Code § 151.307(b)(2) (Exemptions Required by Prevailing Law — export exemption)
• 34 Tex. Admin. Code § 3.360(b)(3) (Customs Brokers — export certification requirements)
• 34 Tex. Admin. Code § 3.323 (Imports and Exports)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/201710011L

Original ruling text

October 19, 2017

Re: Private Letter Ruling No. 2017010112

Dear **:

We issue this private letter ruling in accordance with Rule. 3.1, Private Letter Rulings and General Information Letters.[1] We are responding to your request dated October 12, 2015. Detrimental reliance relief is provided in accordance with Rule 3.10, the Taxpayer Bill of Rights.

You requested guidance on a proposed electronic export verification system.

Facts Presented

** is a smartphone application for foreign residents who purchase goods in Texas for export. It allows a customs broker to verify exports electronically rather than in person.

When a foreign resident (the "User") registers with **, she must upload a copy of her passport, laser visa identification card, or picture foreign voter registration identification to **'s server as proof of foreign citizenship.

The User can then create "shopping events" on the ** application. For each shopping event, the User uploads a current photograph; a copy of her U.S. Customs & Border Protection Form 1-94 (Arrival/Departure Record) or other travel documentation; and pictures of the items purchased, along with receipts. The User also fills out a form, via the ** application, to provide information for each shopping event, including: (1) the foreign country of destination; (2) the date and time the merchandise is to arrive at the destination; (3) the date and time of the purchase; (4) the address of the place where the User purchased the merchandise; (5) the sales price of the merchandise and the quantity purchased; and (6) a description of the merchandise.

The User uploads a completed electronic version of Comptroller Form 00-985 ("Assignment of Right to Refund") naming the licensed customs broker as the assignee. To complete the shopping event, the User electronically signs a form stating that the User has provided the information and documentation required by Rule 3.360(b)(3) (Customs Brokers).

The customs broker pays the User the amount of the tax refund requested, less the broker's commission, and then begins verifying the refund claim. The customs broker will then verify that the User is transporting the property outside of the United States by examining information the User uploaded. The broker verifies that: the User's photo matches her passport photo; the picture of the merchandise matches the description on the sales receipt; the Form 00-985, completed electronically by the User is complete; and the User resides in the foreign country of destination.

If the broker cannot verify that the User is entitled to the refund claimed, based on the requirements of Rule 3.360(b) and the documents uploaded, the broker either requests additional documentation from the User or reverses the refund payment made to the User's credit card.

If the broker can verify that the User is entitled to the refund claimed, then the broker completes an Export Certification Form that meets the requirements of Rule 3.360(p). Then the customs broker will obtain the sales tax refund from the retailer from whom the User purchased the items, in accordance with Section 151.307(b)(2) (Exemptions Required by Prevailing Law).

Question, Ruling, and Analysis

Our restatement of your question is shown below, followed by our response and analysis.

Question: Is ** a valid export verification method for customs brokers under Section 151.1575(a)(3) and Rule 3.360(b)?

Response: ** is not a valid export verification method because it does not meet the requirements of Section 15l.1575 and Rule 3.360.

Analysis:

Section 151.1575 (Requirements Relating to Issuing Documentation Showing Exportation of Property) requires that the purchaser and customs broker, or an authorized employee of the customs broker, both be physically present when the purchaser's exports are verified. Both must sign Form 00-363, generated by the Comptroller's Licensed Customs Broker Export Certification System in each other's presence. See Section 151.1575(a)(3)(G) and Rule 3.360(b)(3)(E). Both must also perform an attestation "in the presence of each other." See Section 151.1575(a)(3)(I) and Rule 3.360(b)(3)(G). Because the ** User and customs broker are not in one another's physical presence, the smartphone application does not meet the requirements of the statute.

In addition, Section 151.157(g) prohibits a customs broker from authorizing "a person to prepare documentation for the purpose of showing the exemption for tangible personal property under Section 151.307(b)(2)." Rule 3.360(b) further states that "[o]nly a licensed customs broker or an authorized employee of a licensed customs broker may fully or partially prepare, issue, and/or sign a valid export certification form as provided for in this section and in [Rule] 3.323 of this title (relating to Imports and Exports)." The ** system gathers a number of elements provided on the Form 00-363, and thus is used to partially prepare the form, which is not allowed.

The Texas Tax Code and Texas Administrative Code are accessible at www.comptroller.texas.gov/taxes/.

If you have any questions about this private letter ruling, please email us through our website at https://comptroller.texas.gov/web-forms/tax-help/ and reference Private Letter Ruling No. 2017010112.

Sincerely,

Tax Policy Division - Indirect Taxes

Texas Comptroller of Public Accounts

ENDNOTE:

[1] Unless otherwise indicated, all references to "Section" are to the Texas Tax Code, and all references to "Rule" are to Title 34 of the Texas Administrative Code.