How could a Texas seller document an export when transportation was delayed and the goods had not left the country before an audit?

Plain-English summary

A seller was concerned that goods sold for export could still be in the United States when an audit occurred because transportation was not yet available.

The Comptroller recommended shipping through a freight forwarder or customshouse broker. The intermediary could issue a receipt when it took possession and held the goods for export, then provide the bill of lading or broker certification after shipment. If an audit occurred first, the receipt could establish that the goods were in the export process, subject to confirmation that they were still being held for export.

Common questions

Did the seller need proof that the goods were being exported? Yes.

What proof worked before actual shipment? A freight forwarder's or customshouse broker's receipt.

What documentation followed shipment? The bill of lading or customshouse broker certification.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8902L0928E10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller February 24, 1989

Dear ***:

I just want to take a minute to follow-up and confirm the phone
conversation we had this morning.

Any time you sell and export goods, you need to be able to docu-
ment the export. As you pointed out, there are times when the
transportation just isn't available when you are ready to ship.
You were concerned about being taxed on sales that you had made
and had in the export process but that had not yet left the
country.

The best way to handle this problem is to ship these items through
either a freight forwarder or a customshouse broker. They can give
you a receipt for the goods, hold them until transportation becomes
available and ship the goods for you. After they ship the goods, they
can send you the necessary bill of lading or customshouse brokers
certification to document the actual export.

If you are audited before the goods are actually exported, the
freight forwarder or customshouse brokers receipt will prove to
the auditor that the goods are being exported. They may call to
confirm that the goods are still being held for export, but they
will not charge you the tax.

I am enclosing a copy of the rule for your reference.

Please feel free to call or write me any time you have questions.
You can call me toll free at 800-531-5441 or FAX (512) 475-0900.

Sincerely,
Al Van Allen
Taxability Section
Legal Services Division