Could a retailer accept an FDIC or RTC property manager's exemption certificate without receiving separate ownership and agency documents?

Plain-English summary

A May 30 letter required a retailer accepting an exemption certificate from an FDIC or RTC property manager to obtain proof that the agency owned the property and a copy of the manager's agency agreement. It also allowed refunds for periods after the FDIC or RTC acquired title when the same documentation was provided.

The June 25 letter revised that procedure. The management company could issue a certificate stating that purchases were made by or for the FDIC/RTC, and either the manager or the FDIC/RTC could sign it. The manager still had to retain proof of title transfer and written purchasing authority for audit, but no longer had to give those documents to the retailer with the certificate.

The revised letter also said the retailer could issue refunds based on the exemption certificate alone.

What this means for you

Under this 1991 procedure, the seller relied on the exemption certificate while the purchasing agent kept the supporting ownership and agency documents. The account name mattered less than proof that the FDIC or RTC owned the property and that the manager acted as its agent.

Common questions

Who could sign the certificate? Either the management company or the FDIC/RTC.

What did the manager retain? Proof of the FDIC/RTC's title and a written agreement authorizing the manager to purchase for the agency.

Did the retailer need copies? Not under the revised June 25 letter.

Could the retailer refund tax based on the certificate alone? Yes.

Citations and references

• No statute or administrative rule was cited in the letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9106L1116G05

Original ruling text

June 25, 1991

Dear ***:

This is to let you know that we have slightly changed the policy on
accepting exemption certificates from the FDIC/RTC as set out in my letter
to you of May 30, 1991. You may now accept an exemption certificate from
a management company that states that the items being purchased are made
by or for the FDIC/RTC; the certificate may be signed by either the
management company or the FDIC/RTC. The management company is being
required to keep on hand, in case of audit, the following, but we no
longer ask that copies be given to the retailer along with the
certificate:

1. documentation from the FDIC/RTC showing that title to the property
   being managed has actually been transferred to the FDIC/RTC, and

2. a written agreement between the FDIC/RTC and the management company
   that designates the management company as the FDIC/RTC's agent and
   authorizes the management company to make purchases on its behalf.

You may also give refunds on the basis of an exemption certificate alone.

I hope that this makes it easier to deal with accounts involving the
FDIC/RTC, and I further hope that we haven't inconvenienced you too much
by changing the policy.

If I may be of further assistance please do not hesitate to write or call
me at 1-800-531-5441, ext. 3-4677 or 512-463-4677.

Sincerely,

Lucy Glover
Manager, Tax Administration Division

May 30, 1991

Dear **:

I and some of my colleagues have discussed the problems you have raised
concerning exemption certificates from the FDIC and the RTC. To accept an
exemption certificate from a property management company acting on behalf
of the FDIC/RTC, whether or not the name on the certificate is the
FDIC/RTC, you need the following:

• documentation showing when the Property's title was transferred to the
  FDIC/RTC

• a copy of the agency agreement between the FDIC/RTC and the management
  company.

You may refund tax paid by a management company on behalf of the FDIC/RTC
with the same documentation (for periods after the FDIC/RTC acquired title).
The name on the account is no longer of as much importance as the proof that
the FDIC/RTC owns the property and that the management company is acting as
the agent of the FDIC/RTC.

If I may be of further assistance, please do not hesitate to write or
call me at 1-800-531-5441, ext 3-4677 or 512-463-4677.

Sincerely,

Lucy Glover
Manager, Tax Administration Division