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Texas Sales Exemption denied export packer that failed to provide required documentation

By August 29, 2022September 22nd, 2022Texas Sales Tax
Texas Sales Exemption denied export packer that failed to provide required documentation

The Texas Comptroller of Public Accounts ruled that purchases of packing supplies by a taxpayer that exported products outside the United States on behalf of its customers, and shipped other products intrastate via rail cars, were not exempt because the taxpayer failed to provide the required documentation showing which materials were used for the exempt purpose of exporting tangible personal property. When purchased by an export packer to export personal property, crating and packaging supplies are exempt under Tex. Tax Code Ann. § 151.307, whether used to package the export packer’s property, that of vendors shipping such property to their foreign customers, or that of purchasers who contract and pay for such services. Export packers must maintain records showing which materials were used for the exempt purpose of exporting tangible personal property. Proof of export may be shown only by specific documentation, including a bill of lading showing the seller as consignor, the buyer as consignee, and a delivery point outside the territorial limits of the United States, or a bill of lading and a forwarder’s receipt if a freight forwarder takes possession of the property. In this case, the taxpayer’s bills of lading were incomplete: they failed to identify the buyer, seller, consignor, consignee, or delivery location. There was nothing in the record that identified which packaging supplies were used for exporting products, warehousing, or intrastate shipping services via rail cars. Thus, the taxpayer failed to demonstrate the packaging supplies were used only to export property outside the United States. (Texas Comptroller’s Decision No. 115,436, 07/07/2022.)
Texas Sales Exemption denied export packer that failed to provide required documentation
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