Does a bill of lading alone count as proof that goods were exported for a Texas sales tax export exemption?

Subject

Bill Of Lading Alone Is Not Sufficient Proof Of Export

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9307L1253C10

Plain-English Summary

A taxpayer faxed the Comptroller's office asking about proof-of-export requirements, apparently after a retailer refused to treat a bill of lading as sufficient proof that a stereo system had been exported (so that a sales tax refund could be given).

The Comptroller agreed with the retailer: the bill of lading did not contain enough detail to prove the goods were exported, and a sworn statement given after the fact could not be accepted as a substitute for proper proof of export. The letter suggests an alternative — documents from the destination country's customs authority showing the stereo system cleared customs there. Formal customs entry documents like these can also serve as proof of export. The letter cautions that the documentation should be clearly written and in English, and reminds the taxpayer that granting a refund is ultimately at the retailer's discretion. A copy of Rule 3.323 was enclosed with the original letter for reference.

As with other STAR letters, the response closes by noting the opinion is based on the facts submitted and that other, similar facts could produce a different result.

What This Means For You

A bare bill of lading may not be enough. If you're trying to document that goods left the country to support a sales-tax exemption or refund, this letter shows that a bill of lading lacking sufficient detail was found inadequate on its own. Retailers and exporters should not assume a bill of lading alone will satisfy proof-of-export requirements.

After-the-fact sworn statements don't fix a documentation gap. The Comptroller specifically rejected using a sworn statement made after the fact as a way to patch up insufficient proof-of-export documentation. Get your documentation right at the time of the transaction.

Foreign customs entry documents can help. The letter points to documents from the destination country's customs office — showing the goods cleared customs there — as an acceptable alternative form of proof. If you're an exporter, retailer, or preparer dealing with export refund claims, foreign entry/customs paperwork (clearly written and in English) may be your best backup documentation.

The retailer decides on refunds. The letter notes that whether to issue a refund based on the documentation provided is at the retailer's discretion — the Comptroller's letter addresses what documentation could support a refund, not whether the retailer must give one.

Q&A

Q: Is a bill of lading always enough to prove goods were exported for a Texas sales tax refund?
A: Not necessarily. In this letter, the Comptroller found that the specific bill of lading submitted did not contain sufficient detail to prove the goods were exported.

Q: Can a taxpayer submit a sworn statement after the fact instead of proper export documentation?
A: No. The letter states the Comptroller cannot accept a sworn statement made after the fact as proof of export.

Q: What kind of documentation did the Comptroller suggest as an alternative?
A: Documents from the destination country's customs authority showing the goods (a stereo system, in this case) cleared customs there — formal customs entry documents — may also be used as proof of export.

Q: Does the documentation need to be in a particular language?
A: The letter says it would be best if the documentation were clearly written and in English, since refunds are granted at the retailer's discretion.

Q: Who decides whether a refund is actually given?
A: According to the letter, refunds are made at the discretion of the retailer.

Q: What Texas rule governs proof of export in this letter?
A: The letter references Rule 3.323, a copy of which the Comptroller's office enclosed with the response.

Original ruling text

July 23, 1993

Dear ***:

Thank you for your recent fax transmission regarding proof of export
requirements .

The retailer is correct. The bill of lading does not contain
sufficient detail to prove that the goods were exported. We cannot
accept a sworn statement after the fact to be used as proof of export.

However, ** may have documents from ** customs
showing that the stereo system cleared customs there. Formal entry
documents such as these may also be used as proof of export. Please note
however that refunds are made at the descretion of the retailer so it
would be best for *** if the documentation was clearly
written and in English.

I am enclosing a copy of Rule 3.323 for your information.

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

If you have questions or need more information, please call or write.
You may reach me by calling toll free, (800) 531-5441 (ext.34680). My
direct line number is (512) 463-4680. The number for FAX transmissions
is (512) 475-0900. You may write to me in care of Tax Administration
Division.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 93070075L.4 and/or 9307075L