Could a registered engineer's signature and seal replace the purchaser's signature on a predominant-use utility exemption certificate?

Plain-English summary

The Comptroller said a registered engineer's signature and seal did not replace the purchaser's signature on a utility exemption certificate. The engineer certified that a valid study showed predominant exempt use; Rule 3.287 separately required the purchaser's signature and certificate date.

An agent could sign if accompanied by a valid power of attorney specifically authorizing that signature. Even then, Texas could not require a utility to accept an agent-signed certificate if the utility required its own customer to sign.

A utility seller escaped tax liability only by accepting a valid, properly completed certificate in good faith. A certificate missing the purchaser's or properly authorized agent's signature was unacceptable.

What this means for you

Technical certification and purchaser authorization served different functions. A valid predominant-use study did not cure an unsigned exemption certificate.

Common questions

Could the engineer sign instead of the purchaser? No.

What did the engineer's signature establish? That a valid predominant-use study had been completed.

Could an agent sign? Yes, with specific power of attorney, if the utility accepted it.

Was an unsigned certificate audit-valid? No.

Citations and references

• 34 Tex. Admin. Code Rule 3.295(e)(2) — predominant-use study certification
• 34 Tex. Admin. Code Rule 3.287 — exemption-certificate requirements

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9103L1089G05

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

JOHN SHARP
Comptroller March 19, 1991

Dear *:

Thank you for your letter regarding the signing of exemption
certificates issued to utility companies.

You stated that you read Rule 3.295(e)(2) to mean that the
exemption certificate issued to utility companies does not need to
be signed by the business owner if it is signed and sealed by a
registered engineer.

Rule 3.287, Exemption Certificates, provides that an exemption
certificate must be in substantially the form set out in the rule
and lists the items that must be in the certificate. One of these
items is the signature of the purchaser and the date that the
certificate is issued. The registered engineer's signature and
seal on the certificate as discussed in Rule 3.295 is to certify
that a valid study was completed and that the study shows the
predominant use of the utility to be exempt use.

An agent's signature on the exemption certificate would be
acceptable if accompanied by a valid power of attorney signed by
the agent's client specifically authorizing the agent to sign the
certificate. However, we cannot require a utility company to
accept such a certificate if the utility company requires that
their customer, rather than an agent, sign the certificate.

A seller is relieved of the tax liability only if the seller
accepts in good faith a valid and properly completed exemption
certificate. An exemption certificate without the purchaser's
signature (or agent as discussed above) cannot be accepted by the
seller and would not be accepted in an audit.

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 additional information, you may
call me at 463-4666 or the toll-free number 1-800-252-5555 from
outside Austin. You may write to Tax Administration Division.

Sincerely,
Jo Ann Dieck
Tax Administration Division