Did the 30-day export presumption apply to goods held by a freight forwarder arranging shipment?

Plain-English summary

The export rule did not affect the retailer's existing resale, direct-pay, or offshore exemptions.

For export proof, Rule 3.323(c)(1)(D) accepted a copy of the original airway, ocean, or railroad bill of lading describing the goods, plus the freight forwarder's receipt when the forwarder took possession in Texas. A retailer that obtained the proof specified in subsection (c)(1) was not responsible for the 30-day period.

Although property remaining in Texas longer than a month was presumed stored under subsection (c)(3), property held by a freight forwarder while arranging shipment was not treated as purchaser storage subject to that limitation.

Common questions

Did the export rule invalidate the listed existing exemptions? No.

What proof could the retailer use when a Texas freight forwarder took possession? The described bill of lading and the freight forwarder's receipt.

Did the 30-day presumption apply while the forwarder arranged shipment? No.

Citations and references

• 34 Tex. Admin. Code Rule 3.323(c)(1)(D) — export documentation quoted in the letter.
• 34 Tex. Admin. Code Rule 3.323(c)(3) — Texas storage and the one-month presumption discussed 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/8509L0663B07

Original ruling text

September 12, 1985

Dear ***:

Thank you for your letter concerning the changes in the documentation
required for the proof of export exemption.

Your specific questions with my answers follow:

1. Present exemptions on file are still valid and were not affected by
   the new law, i.e., Resale Exemptions, Direct Pay Exemption, Offshore
   Exemption.

Answer: That is correct. The export rule and law have nothing to do
with any of the above exemptions.

2. If merchandise has been shipped from COMPANY A to a forwarder, the
   thirty-day time limit for exportation does not affect COMPANY A. We
   are not responsible for collecting this tax nor for follow-up to insure
   this was shipped out of the country within 30 days. And,

3. Any other interpretation information that will aid us in conforming
   to this law without creating massive amounts of additional paperwork.

Answer: Sec. (c)(1)(D) of Rule 3.323 states, ""A copy of the original
airway, ocean or railroad bill of lading which describes the items being
exported and a copy of the freight forwarder's receipt if the freight
forwarder takes possession of the property in Texas," is acceptable as
proof of export for the retailer making delivery.

Sec. (c)(3) deals with storage in Texas prior to export, and says in
part, "...property stored in Texas loses its exemption..." sufficient
time will be allowed to arrange for shipping. Property in Texas longer
than a month from date of purchase will be presumed to have been stored.

We feel this is sufficient time, but also realize there will be exceptions
and generally are judged on a case by case basis. This however does not fall
on a retailer who obtains proof as outlined in Sec.(c)(1). Property in the
hands of a freight forwarder who is arranging for shipment is not being stored
by the purchaser and is not subject to the thirty day limitations.

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

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division