Could a licensed customs broker use a power of attorney to obtain merchant refunds and pay Texas sales tax directly to Mexican customers at export?

Plain-English summary

A licensed U.S. Customs broker proposed verifying exports to Mexico, issuing customers an export certificate, taking powers of attorney, obtaining refunds from merchants, and paying the tax directly to Mexican customers at the point of export.

The Comptroller rejected that refund method. The broker could observe goods crossing into Mexico and provide export documentation, but Rule 3.323(e)(1) required the purchaser to present the documentation to the seller to receive the tax refund.

If the seller made the refund in cash, Rule 3.323(e)(2) required the seller to obtain a signed receipt from the purchaser.

What this means for you

Export verification and refund authority were separate. The broker could document the crossing, but could not replace the seller-purchaser refund process described in the rule.

Common questions

Could the broker issue export documentation? Yes.

Could the broker refund the tax directly at the border under the proposal? No.

Who had to receive the export proof? The seller, from the purchaser.

What was required for a cash refund? A signed receipt from the purchaser obtained by the seller.

Citations and references

• 34 Tex. Admin. Code Rule 3.323(e)(1) — purchaser presents export documentation to the seller
• 34 Tex. Admin. Code Rule 3.323(e)(2) — seller obtains the purchaser's signed receipt for a cash refund

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9105L1107E13

Original ruling text

May 3, 1991

Dear **:

Thank you for your follow-up letter describing a proposed method
of handling exports to Mexico and subsequent refunds of sales tax
paid by Mexican nationals. As a licensed U. S. Customs broker you
would:

verify that the goods were exported and issue the customer a
Licensed Custom Broker's Export Certification, and have the
Mexican national sign a power of attorney authorizing your
company or its authorized agent to go to the merchant and
obtain their refund on their behalf, then after obtaining the
power of attorney, your firm would refund the tax directly to
the Mexican national at the point of export.

We cannot accept your proposal as a means of providing refunds to
Mexican nationals. There is no problem with your seeing goods
cross into Mexico and providing your customers with export
documentation. However, your refund proposal is not in keeping
with rule 3.323(e)(1) which calls for the purchaser to present
the export documentation to the seller in order to receive a
refund of the tax. If the refund is made in cash, subsection
(e)(2) requires the seller to obtain a signed receipt from the
purchaser.

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

If you have any questions or need more information, please call our
toll-free number 1-800-5331-5441. My direct line number is 512-
463-4680 (FAX (512) 475-0900). You may write to me in care of
Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division