If a customer buys goods for export but the shipper doesn't pick them up from the seller's warehouse within 30 days, does the seller lose the export tax exemption?

Plain-English summary

A retailer wrote to the Comptroller about a recurring situation: customers buy goods in the store and ask that they be shipped directly to an exporter for export out of the country. Under the export documentation law and rule then in effect (revised August 26, 1993), such a sale is exempt from sales tax provided the goods are exported within thirty (30) days of purchase and proper export documentation is provided — only then does the seller refund the sales tax the customer paid. The retailer's problem was that customers sometimes pay for goods and leave them at the retailer's warehouse until the shipping or exporting company is ready to take them, and that pickup sometimes doesn't happen until the 31st day or later — potentially blowing the 30-day deadline through no fault of the seller or customer.

The Comptroller's answer was short and taxpayer-favorable: the export exemption is not automatically lost merely because the 30-day time limit is exceeded, when the goods are warehoused by the seller only because the shipping or exporting company has not yet called for them. The ruling frames the 30-day rule as a presumption about storage/use in Texas rather than a hard deadline — if the seller can show the goods sat in the warehouse purely awaiting exporter pickup (not being used or diverted to some other purpose), the delay past 30 days does not, by itself, defeat the exemption. The Comptroller noted this opinion is based on the facts presented and that different facts, though similar, might lead to a different answer.

What this means for you

Retailers who ship goods to exporters

If a customer's purchase is destined for export and the goods simply sit in your warehouse awaiting pickup by the shipping or exporting company, the sale doesn't automatically become taxable just because pickup slips past the 30-day mark. Keep records showing the goods were being warehoused solely pending the exporter's pickup — not used, resold, or diverted for another purpose — so you can document that the delay was outside your control if the timing is ever questioned.

Sales staff and store managers

The letter's third question — whether the customer can pay and lock in "the last one we have" while waiting on the exporter — reflects the everyday pressure of not wanting to lose a commission-based sale. The Comptroller's answer addresses only the timing problem (a late pickup doesn't itself kill the exemption); it does not say the 30-day documentation and export requirements themselves can be skipped. Proper export documentation is still required for the exemption to apply.

Accountants and tax professionals advising exporters/retailers

This is an early (1994) informal letter interpreting the 30-day export exemption rule as a rebuttable presumption rather than an absolute bar. When advising a client whose export sale exceeded 30 days from purchase to actual export, look at why the delay occurred — a delay attributable to the shipper/exporter's own schedule (versus the seller's or customer's storage/use of the goods) supports treating the sale as still exempt, provided documentation supports that explanation.

Common questions

Q: If goods aren't exported within 30 days of purchase, is the export exemption automatically lost?
A: No. This ruling holds that exceeding the 30-day limit does not by itself void the exemption when the goods were warehoused by the seller only because the shipping/exporting company had not yet called for them.

Q: What if the customer knows in advance the export won't happen within 30 days?
A: The letter raises this exact scenario (a sales-floor situation where the customer wants to buy now even knowing pickup will be late), but the Comptroller's response addresses only the general principle that delay caused by the shipper doesn't defeat the exemption — it doesn't set out a separate rule for pre-known delays.

Q: Does the 30-day clock start at purchase or when the shipper actually takes possession?
A: The taxpayer specifically asked this. The Comptroller's reply doesn't restate or resolve that sub-question directly; it answers the broader point that exceeding 30 days doesn't automatically forfeit the exemption when the delay is due to the shipper/exporter not yet calling for the goods.

Q: Does this letter eliminate the documentation requirement for the export exemption?
A: No. The underlying export exemption still requires proper export documentation; this letter only addresses whether exceeding the 30-day window, by itself, disqualifies an otherwise-valid export sale.

Citations and references

• Tex. Tax Code § 151.307 (export exemption)
• 34 Tex. Admin. Code § 3.323 (Imports and Exports)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9405L1301F09

Original ruling text

May 23, 1994

Dear **:

Thank you for your letter dated May 16, 1994, regarding the
export exemption.

The exemption will not be lost due to the 30-day time limit
being exceeded when item(s) sold are warehoused by the
seller until the shipping or exporting company calls for them.

This opinion is based on the facts presented. Different
facts, though similar might lead to different answers. If
you have any questions or need more information, please
write or call me toll free at 1-800-531-5441, extension
50330, or 512-475-0330.

Sincerely,

Bettie Peterson
Tax Administration Division

May 16, 1994

Tax Policy Department
P.O. Box 13528
Austin, Texas 78711

Re: Export Divergent Use

Dear Tax Policy Department,

I am writing this letter in order that I may get a better
understanding of the Texas Sales and Use Tax law as it
relates to EXPORT DIVERGENT USE. ** has
had numerous customers in the store within the last month
purchasing goods, and requesting that we ship the goods
directly to their exporter for export. Per the export
documentation law and rule revised on August 26, 1993, the
purchase is exempt provided the goods are exported within
thirty (30) days from the date of purchase, and proper
documentation is provided. Only then shall *
* refund the customer the sales tax collected.

My questions relating to this topic are as follows:

1. The customer purchases the goods and for whatever
   reason, the ship is delayed and does not leave port until
   the 31st day or thereafter. Should I refund the customer
   their sales tax money or not?

2. The customer knows that the ship is not leaving the
   port within thirty (30) days, and we inform them that this
   is the last sofa we have and no more are on order. Due to
   the fact that our sales persons are commission only
   employees, they do not want to miss a sale, and at the same
   time, I want to comply with the tax law. Is there any thing
   that I can do to make both the customer happy (refunding
   sales tax when the goods are exported), sales persons happy
   with a sale, and comply with the law?

3. In all situations, the goods are held at our warehouse
   until the shipping/exporting company asks for us to deliver
   them. The law reads thirty (30) days from purchase of the
   goods. If the customer pays for the goods at the time of
   purchase, and the exporter does not take possession of
   the goods until the 31st day, is there any provision in the
   law that the 30 days starts from the time the shipper/exporter
   receives the goods?

As you can tell by the situations mentioned above, I am
trying to work with the customer, sales persons, and sales
tax law, but I feel that I will be losing sales for the
sales persons and making customers unhappy.

Your prompt attention to this matter will be greatly
appreciated.

Regards,

NOTE: Previous Accession Number 9405358L