Can a Texas retailer refuse to accept a foreign shopper's export certificate from any customs broker except the one it exclusively works with?

Plain-English summary

A foreign shopper who bought goods in Texas tried to get a sales tax refund on the basis that the merchandise was being exported, using an export certificate issued by a customs broker. The retailer's own exclusive broker refused to accept that certificate, saying "the only ones that are good are the ones we issue." The shopper complained to the Comptroller, arguing this exclusive-broker practice was unlawful discrimination against competing licensed Custom House Brokers, since the sales tax refund process is ultimately "state action."

The Comptroller explained the underlying legal framework: Tex. Tax Code Sec. 151.307(b)(2) allows proof of export to be shown through documentation from a U.S. Customs Broker that is (1) licensed by the Comptroller under Sec. 151.157, (2) certifies delivery outside the U.S., and (3) carries the stamp required by Sec. 151.158.

But critically, the statute does not require a retailer to accept every licensed broker's certification, and it does not prohibit a retailer from having an exclusive contractual arrangement with just one broker. The Comptroller stated it has historically declined to regulate these exclusive arrangements and takes no position for or against a retailer's choice to work exclusively with a single customs broker.

What this means for you

Retailers serving international shoppers

You're allowed to work exclusively with a single customs broker for export-tax-refund purposes and can decline to honor certificates from other brokers, without running afoul of Texas sales tax law — the statute sets minimum requirements for what counts as valid export proof, but doesn't force you to accept every broker.

Customs brokers

A retailer's exclusive relationship with a competing broker is not something the Comptroller will intervene on; this letter doesn't address whether other bodies of law (antitrust, unfair competition) might apply, only that state tax law doesn't require broker-neutrality.

International shoppers seeking export tax refunds

If a store works with only one broker, you may need to use that broker specifically (or find a different retailer) to get your export tax refund processed, since the retailer isn't legally required to accept a competing broker's certificate.

Common questions

Q: Must a Texas retailer accept export certificates from any licensed customs broker?
A: No, per this letter — the law doesn't require retailers to accept every broker's certification.

Q: Is an exclusive retailer-broker arrangement illegal under Texas tax law?
A: No, per this letter — the Comptroller has declined to regulate such arrangements and takes no position on them.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.307(b)(2) (proof of export via licensed customs broker documentation)
• Tex. Tax Code § 151.157 (Comptroller licensing of customs brokers)
• Tex. Tax Code § 151.158 (customs broker export stamp requirement)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9805758L

Original ruling text

May 21, 1998

Dear Mr. **:

Thank you for your recent letter to Mike Kazen. I have been asked to respond.
Your letter is restated in part with response below.

On Monday, May 4, 1998, I issued an Export Certificate to ** from
Guadalajara, Jalisco, Mexico to be submitted to ** in
**. When my employee approached the department store for the
refund a gentlemen referred him to BROKER COMPANY located on **.
After arriving at the BROKER COMPANY the clerk refused to accept the
certificate because "it was not of any value", the only ones that are good are
the ones we issue". I am complaining because BROKER COMPANY as an agent for
** is not accepting any Tax Exempt Certificates other than the ones
they issue. This, in turn, is not equal under the law because they blatantly
discriminate against other Custom House Brokers. The sale tax paid at the time
of purchase is refunded to the customer on proof that the merchandise has been
exported. BROKER COMPANY is abridging the practice allowed by Federal and State
law to refund taxes to merchandise that is consumed out of the State. The
collection and refund of a Sale Tax is State Action. Anti-discrimination
measures should be in order. This practice will eventually lead to legal
ramifications for ** and BROKER COMPANY. BROKER COMPANY is in no
way entitled or protected against a discrimination law suit or an Anti-Trust
case. ** should accept a Legal Tax Exempt Certificate from any
brokerage firm because it accepts the ones from BROKER COMPANY. BROKER COMPANY
is not the only licensed business allowed by the State of Texas to issue Tax
Exempt Certificates. I thank you for the attention you will place in this
matter. I believe that this will not be the accepted business practice of
** anymore.

Response: Tax Code Section 151.307(b)(2) states that proof of export may be
shown by documentation provided by a United States Customs Broker:

1. licensed by the comptroller under Section 151.157;
2. certifying that delivery was made to a point outside the territorial limits
   of the United States; and
3. to which a stamp issued under Section 151.158 is affixed in the manner
   required by that section or Section 151.157

The statute does not require retailers to accept brokers export certifications
and does not prohibit exclusive contractual arrangements between a broker and a
retailer. To date, we have declined to regulate such arrangements.
Therefore, we take no position for or against the retailers' exclusive use of a
particular customs broker.

This opinion is rendered based on the facts presented. If there are additional
or different facts, the opinion may change.

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. The email address is .

Sincerely,

Al Van Allen
Tax Policy Division