Was the seller's Shippers Export Declaration sufficient proof for a Texas sales-tax exemption on exports to Mexico?

Plain-English summary

The seller submitted a “Shippers Export Declaration” to document sales exported to Mexico. The Comptroller found that document did not satisfy the acceptable-proof requirements in Rule 3.323(c)(1).

The letter also said exemption certificates were unnecessary and had no significance for export transactions. If the customer took possession of the merchandise in Texas, the seller had to collect and report tax. Once proper export documents were supplied, the seller could refund the tax under Rule 3.323(e).

What this means for you

An export claim required the specific proof prescribed by the export rule. A generic exemption certificate could not replace that proof, and Texas delivery triggered collection until qualifying export records were produced.

Common questions

Was the submitted declaration acceptable? No.

Would an exemption certificate solve the problem? No. The letter says exemption certificates have no significance in export situations.

What if the customer took possession in Texas? The seller had to collect and report sales tax.

Could the seller later refund the tax? Yes, after receiving proper export documents and following Rule 3.323(e).

Citations and references

• Comptroller Rule 3.323(c)(1) — acceptable proof for exports beyond U.S. territorial limits.
• Comptroller Rule 3.323(e) — refund procedures after proper export documents are presented.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8707L0819D01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller June 19, 1987

Dear ***:

Thank you for your recent letter regarding the acceptability of a
"Shippers Export Declaration" for documenting export sales into Mexico
for sales tax exemption purposes.

Rule 3.323 (c)(1) explains the only proof of export acceptable when an
exemption is claimed because tangible personal property is exported
beyond the territorial limits of the United States. The documentation
you have provided does not meet the requirements of the rule and is
therefore unacceptable for sales tax exemption purposes. Also,
obtaining exemption certificates is not necessary because they have no
significance in export situations.

A copy of the rule is enclosed for your information and so you can
determine the documentation required which best suits your needs.

I would like to point out that if your customer takes possession of the
merchandise in Texas, you must collect and report sales tax. Once the
proper export documents are presented to you, you may refund the tax
to your customer under the procedures outlined in section (e) of the
rule.

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,
Sandi Skaggs
Tax Policy Section
Tax Administration Division