Could a purchaser use MTC Exhibit 1100-D in Texas for resale and manufacturing purchases, or did it need a Texas exemption certificate?

Plain-English summary

The Multistate Tax Commission's Exhibit 1100-D did not substantially match the Texas resale-certificate form required by Rule 3.285, but the Comptroller's Audit Division nevertheless accepted it as a valid Texas resale certificate.

The purchaser could give Exhibit 1100-D to suppliers for items bought for resale, lease, or rental within the United States or its territories and possessions. That included manufacturing materials that became component parts of taxable products sold to customers.

The form could not be used for items that qualified only for an exemption and were not resold. For example, manufacturing property that was necessary or essential and consumed in production, but did not become part of the product, required a certificate substantially in the form required by Rule 3.287 unless Exhibit 1100-D was altered to contain the exemption certificate's required information.

Common questions

Did Texas accept MTC Exhibit 1100-D? Yes, as a resale certificate.

Could it cover component parts incorporated into products for sale? Yes.

Could it cover consumed manufacturing items that were not resold? Not without the information required for a Texas exemption certificate.

Citations and references

• 34 Tex. Admin. Code Rule 3.285
• 34 Tex. Admin. Code Rule 3.287

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8910L0961A01

Original ruling text

October 2, 1989

Dear ***:

Thank you for your inquiry regarding the acceptability of a multi-jurisdiction
sales and use tax certificate.

The certificate that you submitted is an MTC Exhibit 1100-D. This certificate
is prepared by the Multistate Tax Commission.

Although the certificate submitted isn't substantially in the form of the
enclosed Texas Sales Tax Resale Certificate (as required by the enclosed Rule
3.285), our Audit Division has accepted the certificate you submitted as a
valid resale certificate. Accordingly, you may issue the MTC exhibit 1100-D to
your suppliers in lieu of sales and use taxes if you are purchasing the items
for resale, lease, or rental within the geographical limits of the United
States or its territories and possession in its present form or as an
attachment to or integral part of other taxable items. For example, you may
issue the certificate on items used in manufacturing if the item becomes a
component part of the product which is sold.

However, you may not issue the multi-jurisdiction sales and use tax certificate
on items which qualify for exemption under the enclosed Comptroller's Rule
3.287 (Exemption Certificates) but are not resold as indicated above.
Therefore, you must issue an exemption certificate which is substantially in
the form required by Rule 3.287 unless the MTC Exhibit 1100-D is altered to
contain the required information for an exemption certificate. For example,
you must issue an exemption certificate (not the MTC Exhibit 1100-D) on
tangible personal property which doesn't become a component of the product to
be sold but is necessary or essential to and consumed in the actual
manufacturing process. I have enclosed a Texas Sales Tax Exemption Certificate
which you may reproduce as needed.

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

If you have any question, please contact Tax Correspondence. You may call toll
free 1-800-242-5555, or our regular number is 512/463-4600. My extension is
3-4662.

Sincerely,

Bob Jeffcoat
Tax Correspondence