Was the requester's existing diplomatic tax-exemption card still valid for Texas sales tax?

Plain-English summary

The requester tried to use a diplomatic tax-exemption card associated with an institute to avoid sales tax on a health-club membership. Based on information the Comptroller had received from the U.S. Department of State, the Comptroller said that card was no longer valid.

The response enclosed information from the State Department's Office of Foreign Missions about new exemption cards and invited the requester to submit any further State Department information concerning the requester's exemption status.

The attached correspondence said that, as of February 15, 1986, the health club had been told to accept only tax-exemption cards issued by the U.S. Department of State's Office of Foreign Missions. That statement came from the attached health-club letter; the Comptroller's own response was limited to finding the requester's existing card invalid.

Common questions

Did the Comptroller accept the existing card? No.

What official information controlled the response? Information received from the U.S. Department of State.

Could the requester submit more proof? Yes. The Comptroller invited a copy of any additional State Department information about the exemption status.

Citations and references

The requester's attached letter mentions the Taiwan Relations Act, Pub. L. 96-8, but the Comptroller's response does not interpret or rely on a cited provision of that law.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8603L0708G07

Original ruling text

March 20, 1986

Dear **:

I have received your letter of March 14, 1986, concerning your diplomatic tax
exemption.

I am enclosing a flier from the Office of Foreign Missions U.S. Department of
State concerning new Tax Exemption Cards issued by the Department of State.

Based on the information we have received from the Department of State, your
Tax Exemption Card is no longer valid.

If you obtain more information from the Department of State concerning your
exemption status, please send me a copy.

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Administration Division.

Sincerely,

Adina Whittemore
Tax Policy Section
Tax Administration Division

March 14, 1986

Sales Tax Control Division
Comptroller of Public Account
Capital Station
Austin, TX 78774

Re : Tax Exemption Card issued by INSTITUTE

Dear Sirs:

I am working for the COUNCIL which is a counterpart of INSTITUTE.

Pursuant to the related provisions of the Taiwan Relation Act (PL 96-8) I am
entitled to share the privilege of tax exemption. A photo copy of my Tax
Exemption Card is enclosed for your reference.

Unfortunately, I was informed that this card could not be accepted by your
office. Enclosed please find a letter from COMPANY dated March 6, 1986 which is
self-explanatory.

Since the issuance of this card has been authorized by the Secretary of State,
U. S. Department of State. I think it shall be effective. Although the sale tax
is only a small amount, in this case, it will affect the effectiveness of this
card in principle. Therefore, it will be greatly appreciated if you could help
me clarify this situation.

If you have any questions about this matter, please contact INSTITUTE in Taiwan
or let me know. I look forward to hearing from you and thank you for your help.

Sincerely yours,

cc. COMPANY

March 6, 1986

Re: Sales Tax required for membership.

Dear **:

The Sales Tax Control division of the State of Texas Comptroller's Head Office
in Austin has declined to accept the INSTITUTE in Taiwan Tax Exemption Card as
a waiver of sales tax on your membership.

Information as of today is that effective February 15, 1986 only Tax Exemption
Cards issued by the U. S. Department of State, Foreign Missions Office are
acceptable as a tax waiver. Apparently that agency now issues diplomatic tax
waivers for all other agencies.

We would like for you to accept the membership you have become entitled to in
the Merchants' Drawing, however it will be necessary for you to either pay
$** in sales tax or supply a new exemption card from the U. S.
Department of State. Last year, when sales tax on health club memberships was
first instituted and we were not fully familiar with the procedures, COMPANY
paid a substantial fine to the State of Texas for errors in sales tax.
Therefore, we are extremely cautious to follow state prescribed procedures so
that we will not be penalized again.

Your check for $** is enclosed back to you. We will hold your place
in the promotion for five days to permit you time to respond again if you like.

Very truly yours,

**, President