What documentation did a retailer need to sell tax-free to a property manager acting for the FDIC or RTC?

Plain-English summary

A retailer asked what documentation it needed to sell tax-free to a property company acting for the FDIC or RTC. The Comptroller said its earlier policy had been made easier.

The retailer could accept an exemption certificate stating that the items were purchased by or for the FDIC/RTC. Either the management company or the FDIC/RTC could sign the certificate. The management company had to retain proof that title to the managed property had transferred to the FDIC/RTC and a written agreement designating it as purchasing agent, but it did not have to give copies to the retailer.

The letter also allowed refunds based on the exemption certificate alone.

What this means for you

The certificate was the seller-facing document under this 1991 procedure. The property manager, not the retailer, retained the title-transfer and agency records for a possible audit.

Common questions

What had to appear on the certificate? It had to state that the purchases were made by or for the FDIC/RTC.

Who could sign it? The management company or the FDIC/RTC.

What records stayed with the manager? Proof of title transfer and the written agency agreement authorizing purchases.

Could the seller 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/9106L1116G10

Original ruling text

June 25, 1991

Dear ****:

I wrote you on May 31, 1991 and answered your inquiry on what documentation
to get along with an exemption certificate in order to sell tax free to a
property company acting on behalf of the FDIC/RTC. Our policy has changed
slightly to make it somewhat easier in these situations. 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