Did calculators, security equipment, and office furniture shipped to Indonesia qualify as drilling or offshore mineral-exploration equipment?

Plain-English summary

The Texas Comptroller said the listed calculators, security equipment, and office furniture were not drilling equipment under Section 151.324(b). They also were not tangible property exclusively used for mineral exploration or production offshore outside Texas.

The purchaser still had to provide vendors with proper export documentation to claim sales-tax exemption for the Indonesia shipments.

The letter did not decide the diesel-fuel issue. It said diesel fuel was subject to fuels tax rather than only limited sales tax and referred that question to the Fuels Tax Policy Section.

What this means for you

Failing the special drilling or offshore-use exemption did not necessarily defeat a separately documented export. The purchaser needed to rely on the correct exemption ground and supporting records.

Common questions

Were the office and security items drilling equipment? No.

Were they exclusively used qualifying offshore property? No.

Could export documentation matter? Yes.

Did the letter decide diesel-fuel tax? No.

Citations and references

• Tex. Tax Code § 151.324(b) — drilling equipment and offshore mineral-use exemption raised in the letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8701L0790D01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller January 20, 1987

Dear ***:

Thank you for your letter of January 5, 1987 concerning the taxability of
diesel fuel, calculators, security equipment and office furniture shipped
to
Indonesia.

First, diesel fuel is subject to fuels tax not limited sales tax. I have
asked Don Lawrence of the Fuels Tax Policy Section to answer this
question
for you. My answer is limited to those items subject to limited sales
tax.

Section 151.324(b) provides an exemption for drilling equipment. The
equipment that you listed is not drilling equipment; nor is it tangible
personal property exclusively used for exploration or production of
minerals
offshore outside Texas.

You must continue to provide your vendors with proper export
documentation
in order to be exempted from the sales tax.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

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,
Julie Pesl
Tax Administration Division