What documentation could a service provider accept before stopping sales-tax collection from a manager acting for the RTC?

Plain-English summary

A provider of taxable services was told by a property manager that the property belonged to the Resolution Trust Corporation and that the provider should stop collecting sales tax.

The Comptroller said the provider could accept, in good faith, a fully completed and signed exemption certificate from the management company. The manager could sign as RTC's agent, and the certificate should state that the company was acting as RTC's agent when buying the services.

For an audit, the manager had to maintain written proof of the agency relationship and proof that title had passed to the RTC. The provider needed only the properly completed exemption certificate to be protected from responsibility for collecting tax on services at that property.

If the provider billed the RTC directly, it could accept either an exemption certificate or an official U.S. government purchase voucher instead of collecting tax.

What this means for you

A vendor did not have to collect and retain every document proving the property manager's federal agency relationship. The vendor's protection came from accepting a properly completed certificate in good faith; the purchaser retained the underlying agency and title records.

Common questions

Could the manager sign the certificate? Yes, as RTC's agent.

What should the certificate say? That the management company acted as RTC's agent in purchasing the services.

Who kept the agency and title evidence? The property manager.

What could support a direct RTC billing? An exemption certificate or official U.S. government purchase voucher.

Citations and references

The letter did not identify a numbered statute or administrative rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9107L1121A13

Original ruling text

July 22, 1991

Dear ****:

Thank you for your recent letter. As I understand it, the
manager of certain property on which you perform taxable
services has called you to advise you that the property is
owned by the RTC, and to ask you to stop collecting sales
tax from him. You ask what steps you must take to protect
yourself if you stop collecting the tax.

You may accept, in good faith, a completely filled out and
signed exemption certificate (blank copy enclosed) from the
management company. The certificate may be signed by the
property manager as "agent" for the RTC. A certificate
issued by the property manager should contain an assertion
that the management company is acting as an agent of the RTC
in purchasing your services. Such a certificate, accepted
in good faith, will relieve you of the responsibility of
collecting tax from this property manager for services
rendered at the property in question.

In case of audit, the manager has to maintain written
documentation of his agency relationship with the RTC, and
proof that title to the property has passed to the RTC.
However, the signed and completed exemption certificate is
all you need to protect yourself in case of audit.

If you bill the RTC directly for any services, you may
accept either an exemption certificate or an official U.S.
government purchase voucher instead of charging tax.

This opinion is based on the facts presented. Different
facts, though similar, might lead to different answers. If
you have further questions, feel free to write or call me at
1-800-525-5555, ext. 3-3889.

Sincerely,

John Christian
Attorney
Tax Administration