Ezel / Tax Rulings / TX
TX 9004L1029C02 Sales and/or Use Tax (State,Local,MTA) 1990-04-24

Was labor subject to Texas sales tax when it was performed at a twin plant in Mexico, with or without Maquiladora export documents?

Short answer: No. Labor performed in Mexico was not subject to Texas sales tax whether billed to a twin plant with valid Maquiladora documents or to a Mexican company without them. When the documents were absent, the invoice should clearly state that the work was performed in Mexico.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Labor performed on the premises of a twin plant in Mexico was not subject to Texas sales tax.

That answer applied when the invoice went to a twin plant presenting a valid Maquiladora Export permit and exemption certificate. It also applied when the invoice went to a Mexican company that had not presented those documents, but in that case the service invoice needed to state clearly that the work was performed in Mexico.

Common questions

Was Mexico-performed labor taxable in Texas? No.

Did the answer depend on having Maquiladora documents? No, but documentation affected what the invoice needed to say.

What should an invoice say without the permit and certificate? That the work was performed in Mexico.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

BOB BULLOCK
Comptroller

April 24, 1990

Dear ***:

Thank you for your recent letter which is restated in part
with responses below.

Question: Is labor taxable if it is performed in Mexico on
the premises of a twin plant and if the invoice is billed
to a twin plant that presents a valid Maquiladora Export
permit and valid Maquiladora Exemption Certificate?

Answer: The charge would not be subject to Texas sales tax.

Question: Is labor taxable if it is performed in Mexico on
the premises of a twin plant and if the invoice is billed
to a Mexican company that has not presented a valid Maquil-
adora Export permit and valid Maquiladora Exemption Certi-
ficate?

Answer: The charge would not be subject to Texas sales tax
but the service invoice should clearly state that the work
is performed in Mexico.

This opinion is rendered based on the facts you presented.
Other facts, though similar, may yield different results.

Feel free to call or write me if you have questions. You
can reach me by calling toll free 800-531-5441 or FAX (512)
475-0900.

Sincerely,
Al Van Allen
Taxability Section
Legal Services Division

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