Could an export packer buy crating and packaging supplies tax-free, and did that treatment clearly cover sheet lead used as export shielding?

Plain-English summary

The Comptroller said an exemption certificate did not need a sales tax permit number to be valid. Under Rule 3.314(d)(3) and (4), an export packer could give a certificate for crating and packaging supplies used exclusively to export tangible personal property.

Rule 3.314(d)(2) also covered packaging supplies listed in Rule 3.314(a)(2), but sheet lead was not on that list. Before accepting the certificate, the seller was advised to obtain an explanation of how the unusually heavy material was used in export packing.

The attached June 8 response said the lead lined all six inner faces of a package containing a computer circuit card exported to Colombia, protecting it from X-ray scanning. It also described other radiation-shielding uses. The record contains no later Comptroller response deciding whether those facts made the sheet lead exempt.

What this means for you

The general export-packer exemption was clear for qualifying listed supplies used exclusively in exports. The sheet-lead claim required further factual support, and the attached taxpayer explanation is not itself an agency holding.

Common questions

Did the certificate need a sales tax permit number? No.

Could an export packer exempt ordinary qualifying crating and packaging supplies? Yes, when used exclusively for exporting tangible personal property.

Was sheet lead on the rule's listed-supply list? No.

Why did the packer use it? As an X-ray shield for a computer circuit card shipped to Colombia.

Did the Comptroller ultimately approve the sheet lead? This record does not say.

Citations and references

• Comptroller Rule 3.314(d)(3), (4) — crating and packaging supplies used exclusively for exports.
• Comptroller Rule 3.314(d)(2) and (a)(2) — exemption for listed packaging supplies; the letter says sheet lead was not listed.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8706L0819E02

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller June 2, 1987

Dear ***:

I have received your note of May 27, 1987, and a copy of your letter of
April 21, 1987.

Unfortunately, we have no record of receiving your April 21st letter.

I am enclosing a copy of Rule 3.314, Wrapping, Packing, Packaging,
Supplies, Containers, Labels; Tags and Export Packers.

An exemption certificate does not need a sales tax permit number to be
valid. Please note under 3.314 (d)(3) and (4), an export packer may
give an exemption certificate in lieu of tax on crating and packaging
supplies used exclusively for exporting tangible personal property.

Under 3.314 (d)(2) an export packer may give an exemption certificate in
lieu of tax on packaging supplies listed in 3.314 (a)(2). This list does
not include sheet lead. In order to protect yourself, I suggest before
you accept the certificate in lieu of tax, that you have CORP A explain
how sheet lead is used in export packing, as this material is unusually
heavy for packaging material.

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,
Adina Whittemore
Tax Policy Section
Tax Administration Division

June 8, 1987

RE: USE OF LEAD IN EXPORT PACKAGING

Gentlemen:

In response to your inquiry of June 5, 1987, the lead sheet purchased
from you was used
as a liner for a package containing a computer circuit card for export to
Colombia.

Our customer specified that the package incorporate protection against
X-ray scanning devices, since it was determined that X-rays could damage or
alter the electronic program- ming of the merchandise. The outer package was a
tri-wall fiberboard box, selected for it's light weight combined with unusual
strength and durability; characteristics important to shipment by air freight
as this consignment was handled. The sheet lead was ordered cut-to-size so
that it could be placed along all six inner faces of the package as a shield.

For your future reference, it is not uncommon for sheet lead to be
incorporated as protec-tion for the exterior environment as well in the case of
shipping such merchandise as radioisotopes and instruments or articles
containing sources of ionizing radiation. Lead is an effective shielding
medium against most alpha, beta, gamma, and X-ray emitting substances, while
polyethylene or paraffin wax may be incorporated in shielding against neutron
emissions. We have incorporated sheet lead in packaging for such purposes in
the past.

We hope that the foregoing answers the question posed by Mr. Bullock's
office. If we can be of further assistance in the matter, please don't
hesitate to contact the undersigned.

Yours very truly,.