Ezel / Tax Rulings / TX
TX 9002L0979F13 Sales and/or Use Tax (State,Local,MTA) 1990-02-20

Did 38 days of bank safekeeping defeat the export exemption for gold when the buyer did not take possession until removing it from the United States?

Short answer: No. The rule's 30-day storage provision applied only when the buyer possessed the property in Texas. Because the seller or bank held the gold until export, the buyer did not possess it for 30 days and the export exemption applied.

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This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A buyer purchased 30 kilograms of gold, but the bank kept it in safekeeping until the buyer was ready to remove it from the United States.

The memo said Rule 3.323's tax provision for property stored in Texas longer than 30 days applied only when the buyer possessed the purchased property. Holding by the seller or a freight forwarder did not count as the buyer's possession.

Because the buyer did not take delivery during the 38-day period, the export exemption applied. The memo added that it did not matter whether the bank acted as broker or factor because the sale qualified for the exemption either way.

Common questions

Did the 38-day delay count as taxable use or storage by the buyer? No.

Why not? The bank, not the buyer, possessed the gold until export.

Did the bank's exact agency role change the result? No, because the export exemption applied in either case.

Citations and references

  • 34 Tex. Admin. Code Rule 3.323 (Imports and Exports)

Source

Original ruling text

Date: February 20, 1990

TO: Antonio Rocha, Jr. **

FROM: Tom Soto, Taxability Section of Legal Services

SUBJECT: BANK Transactions.

Sale of 30 Kilos of gold by BANK for INDIVIDUAL A to INDIVIDUAL B.

INDIVIDUAL B states in his affidavit that the bank held the gold in safekeeping
until he could remove it from the United States. Apparently INDIVIDUAL B did
not take delivery from the bank until he was ready to export it. In that case
the 38 days don't constitute a "use."

The section of rule 3.323 that imposes tax on property stored in Texas for
longer than 30 days, does so only when the buyer has possession of the property
purchased. If a freight forwarder (or the seller) has it, then the 30 days
don't apply. If the bank did sell the gold and held it, INDIVIDUAL B did not
have possession in Texas for 30 days and the Export exemption applies.

We would need some hard evidence to overcome the affidavits of both the buyer
and seller that they arranged for the sale themselves. But, because the sale
will qualify for the export exemption, it doesn't matter whether the bank was
acting as a broker or a factor.

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