Can a retailer use SKU codes on cash register tapes (instead of a written item description) to support a Texas sales tax export refund claim?

Plain-English summary

A Texas retailer wrote to the Comptroller's office asking whether its recordkeeping was good enough to support export sales tax refund claims under new export rules taking effect January 1, 1993. The retailer's registers printed only a multi-digit SKU code on cash register tapes and merchandise tags — no written description of the item (like "dress" or "sweater") — and it asked whether matching the SKU code on the register tape to the SKU code on the merchandise ticket would be sufficient documentation, and whether a customs broker's export form referencing "assorted merchandise per Invoice No. 123" would also be adequate.

After reviewing sample merchandise tags and cash register tapes the retailer sent in, the Comptroller's office (Tax Administration Division) confirmed two things: (1) SKU codes may be used to identify merchandise on customs brokers' export certifications, and (2) the fact that a cash register tape shows only a SKU code, with no separate written description of the merchandise, does not by itself prevent the retailer from getting a refund on an otherwise valid export refund claim. The office sent along copies of Rules 3.323 and 3.360 for further reference, and stressed that the opinion was based on the specific facts and documents the retailer presented — other, similar facts could yield a different result.

What this means for retailers and export sellers

Retailers selling to export customers

If your point-of-sale system only prints a SKU/stock number (not a plain-language item description) on receipts and tags, this ruling indicates that alone won't disqualify an otherwise valid export tax refund claim, as long as the SKU code lets the item be matched and identified. It's still worth reviewing current versions of Rules 3.323 and 3.360, since export documentation rules can change and this letter is based on one taxpayer's specific facts from 1992.

Customs brokers and export documentation preparers

The letter confirms SKU codes are an acceptable way to identify merchandise on a customs broker's export certification, which can support how export forms are completed when register receipts don't carry a full item description.

Accountants and tax professionals advising exporters

This is a narrow, fact-specific letter ruling, not a general rule — it addresses only whether a missing written description (with a SKU code present) defeats an otherwise valid claim. It does not address the retailer's other two questions (whether generic broker-form language like "assorted merchandise" is adequate, or what happens if documentation is later found insufficient), so don't read it as resolving those points.

Common questions

Q: Does a cash register receipt need a written item description to support an export sales tax refund claim?
A: Not necessarily. The Comptroller's office told this retailer that a cash register tape showing only a SKU code, without a separate description, does not by itself prevent the retailer from refunding tax on an otherwise valid claim.

Q: Can SKU codes be used on customs broker export certifications?
A: Yes — the letter states SKU codes may be used to identify merchandise on customs brokers' export certifications.

Q: Does this ruling mean any documentation with a SKU code will always be accepted?
A: No. The Comptroller expressly noted the opinion was based on the facts presented and that other, similar facts might yield a different result. It also did not directly answer the retailer's separate questions about generic broker-form descriptions or what happens if documentation later proves insufficient.

Q: Can I rely on this 1992 letter for my own business today?
A: No. It was issued to one specific taxpayer based on the samples that taxpayer submitted, and export documentation rules may have changed since 1992. Check current Comptroller guidance and Rules 3.323 and 3.360 for present-day requirements.

Citations and references

Rules cited (sent to the taxpayer for reference, not quoted in the letter):

• 34 Tex. Admin. Code Rule 3.323
• 34 Tex. Admin. Code Rule 3.360

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9212702L

Original ruling text

December 14, 1992

VIA FAX

Dear **:

Thank you for your follow-up FAX transmission including copies of merchandise
tags with SKU codes and sample cash register tapes. Your correspondence of
December 4th and 10th is included by reference.

SKU codes may be used to identify merchandise on customs brokers export
certifications. The fact that a cash register tape does not include another
description of the merchandise sold will not in and of itself prevent your firm
from refunding tax on an otherwise valid refund claim.

I am sending copies of Rules 3.323 and 3.360 under separate cover.

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

If you have questions or need more information, please call or write. You may
reach me by calling toll free, (800) 531-5441 (ext. 34680). My direct line
number is (512) 463-4680. The number for FAX transmissions is (512) 475-0900.
You may write to me in care of Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

December 10, 1992

Mr. A. Van Allen
State Of Texas
Tax Administration Office
Capital Station
Austin, TX 78774

RE: NEW EXPORT RULES - NOVEMBER 1992

Mr. Van Allen:

Thank you for your timely response concerning our recent correspondence with
regard to the above mentioned sales tax issue.

Per your request, enclosed you will find examples of:

A. RETAIL COMPANY merchandise tickets which display the SKU code. These tickets
are affixed to our merchandise

B. Register receipts which also display the SKU code.

C. Register receipts which display both the SKU code and a general merchandise
description.

Please note that the description mentioned in Item C is not yet available
throughout all of our register network.

The SKU code is noted on each of the respective items. In a normal sales
transaction, the numbers would be Identical on both the merchandise ticket and
the register receipt. Our examples do not match as we are unable to replicate
an actual sales transaction here in our offices.

Generally, when brokerage export forms are presented for tax refund, only the
register invoices are attached. Merchandise tickets are not usually returned to
our store personnel. Thus, the register receipts and corresponding brokerage
export document will comprise our permanent record of these transactions. If
the register receipts are deemed sufficient identification under the new export
rules, we believe this documentation will be in compliance with Texas state
requirements.

I hope the enclosed records will facilitate a decision concerning our
documentation in regard to proof of export under the new rules.

If additional information is required, please feel free to once again contact
my office.

Thank you.

Very truly yours,

December 4, 1992

Controller of Public Accounts
Capital Station
Austin, TX 78774

Attn: Tax Correspondence

RE: NEW RULES FOR EXPORT'S - NOVEMBER 1992

Dear Sir/Madam:

Please accept this letter as our request for a letter ruling in reference to
the aforementioned sales tax issue.

Specifically, we have three major areas of concern as follows:

1. Invoice Merchandise Description -

Presently, our retail outlets issue register receipts which display our
multi-digit SKU identification code. Since an export broker must compare
purchased item(s) to the register receipt, the SKU code on the receipt could be
matched to the SKU code on the merchandise ticket,, which is affixed to the
product. Is this information sufficient enough under the proposed export rules
to serve as an item description?

Although our current registers cannot literally spell out the purchased item.,
we are in the process of upgrading our register network. The new system will
provide expanded capabilities such as descriptive wording. However, we will
still be limited to the most basic descriptive data such as "dress",, "suit",,
or "sweater". The register system cannot be programmed to be more specific.
Does descriptive data of this nature fulfill the intent of the new export
rules?

2. Custom Broker Export Form Description -

Generally, the brokerage export form we have reviewed contain a reference to
"Assorted merchandise per Invoice No. 123" or "Clothing per Invoice No. 123".
Under the new export rules, is this adequate support for the export exemption?
Our invoices are numbered and will contain the SKU identification codes as well
as date, price and store location.

3. Legal Compliance Requirements -

In view of the previously raised issues, what are the procedural guidelines if
this documentation proves insufficient for Texas state requirements? Are we
allowed to post signs in our stores which indicate we are not a participant in
this program? Are we still required to accept export certificates although the
proof of export may not be valid?

We understand that the new export rules are effective January 1, 1993. Due to
the time constraints involved,, we would appreciate a definitive response to
these questions as soon as possible.

Please feel free to contact my office if additional information is required.

Thank you.

Very truly yours,