How can operators of Mexican aircraft document that taxable items (cargo, repair parts) are exported from Texas so sales tax doesn't apply, and does it matter whether the aircraft is a licensed/certified carrier?

Plain-English summary

A Texas seller asked how operators of Mexican aircraft can document that taxable items purchased in Texas were exported, so sales tax wouldn't apply. The Comptroller's Tax Policy Division laid out different rules depending on how the item is used and how the aircraft is designated:

• Cargo, not installed: Operators of any Mexican aircraft can document export of taxable items carried as cargo (not installed in the aircraft) by obtaining a Pedimento de Importaciones from Mexican customs officials. But the buyer must first pay the tax on the purchase, and then request a tax refund from the seller once they provide the Pedimento. A customs broker's certification, by contrast, is only acceptable for items exported aboard licensed and certified carriers — it doesn't work for aircraft that aren't licensed/certified carriers.
• Items installed in "XB"/"XC" designated aircraft: These purchases are taxable, full stop. Items installed by the seller's firm in aircraft with these designations are considered used in Texas, and are not eligible for a sales tax refund.
• "XA" designated aircraft: These are recognized as licensed and certified carriers (the kind the FAA routinely allows to land in the U.S. to pick up passengers and cargo bound for Mexico). Sales tax is not due on aircraft repair and replacement parts affixed to these carriers in Texas. A copy of the Mexican government's certificate of charter, attached to the work order, is sufficient documentation for this exemption.

The letter points the seller to Rule 3.323 (enclosed with the original letter, not reproduced here) for complete information.

What this means for you

Aircraft repair shops and parts sellers serving Mexican carriers

The tax treatment turns on two things: whether the item is installed or just cargo, and how the aircraft is designated. Cargo items can qualify for an export-based refund process using a Pedimento, but the buyer pays tax up front and gets refunded later — it's not an at-sale exemption. For installed parts, only "XA" designated aircraft (licensed/certified carriers) qualify for a same-transaction sales tax exemption on repair and replacement parts, documented with the charter certificate attached to the work order.

Businesses dealing with customs brokers

Don't assume a customs broker's certification is always enough to support an export exemption. This letter is explicit that broker certifications are only acceptable for items exported aboard licensed and certified carriers — for other aircraft, the Pedimento/refund process is what's required instead.

Accountants and tax professionals

This is a useful reminder that "exported" isn't a single tax outcome — it depends on (1) whether the property is cargo versus installed equipment, and (2) the aircraft's regulatory designation (XA vs. XB/XC). The letter also flags that this opinion is based on the facts submitted and that other, similar facts may yield different results.

Common questions

Q: Can a Mexican aircraft operator avoid paying Texas sales tax up front on cargo items?
A: Not entirely — the buyer must first pay the tax, then request a refund from the seller after providing a Pedimento de Importaciones from Mexican customs officials, for items carried as cargo but not installed.

Q: When is a customs broker's certification acceptable for documenting an export exemption?
A: Only for items exported aboard licensed and certified carriers. It is not acceptable for items exported on other aircraft.

Q: Are items installed in "XB" or "XC" designated Mexican aircraft exempt as exports?
A: No. Such items are considered used in Texas and are not eligible for a sales tax refund.

Q: What tax applies to repair and replacement parts affixed to "XA" designated aircraft?
A: No sales tax is due, because "XA" designated aircraft are recognized as licensed and certified carriers. A copy of the Mexican government's certificate of charter attached to the work order documents the exemption.

Q: Can other Mexican aircraft operators rely on this specific letter?
A: The letter states it is rendered based on the facts submitted, and that other facts, though similar, may yield different results.

Citations and references

• Rule 3.323 (referenced in the letter as the source for complete information on documenting exempt export sales; enclosed with the original letter but not reproduced in the extracted text)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9606L1420A03

Original ruling text

June 21, 1996

Dear ***:

Thank you for your recent Fax transmission to Kenneth Timmerman. I have been
asked to respond.

Operators of Mexican aircraft of any type may document the export of taxable
items, carried as cargo but not installed, by obtaining a Pedimento de
Importaciones from Mexican customs officials. Persons using this method must
first pay the tax on their purchases and request a tax refund from you when
they provide you with the "Pedimento". Please refer to Rule 3.323, enclosed,
for complete information. Customs brokers certifications are not acceptable
for items exported on aircraft other than licensed and certified carriers.

Operators of "XB" and "XC" designated Mexican aircraft must pay tax on their
purchases of items installed by your firm in their aircraft. Such items will
be considered to be used in Texas and not subject to sales tax refund.

Mexican aircraft with the "XA" designation will be recognized as licensed and
certified carriers. The Federal Aviation Administration routinely allows such
aircraft to land in this country to take on passengers' and cargo bound for
Mexico. Sales tax is not due on aircraft repair and replacement parts
affixed to such carriers in Texas. A copy of the certificate of charter
issued by the Mexican Government attached to the work order will be
sufficient to document the exemption.

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

You may call me toll free at 1-800-531-5441, ext. 3-4680. The direct
line is 512/463-4680. You may also write to Tax Policy, Comptroller of
Public Accounts. My email address is [email protected].

Sincerely,

Al Van Allen
Tax Policy Division