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Smartphone App Could Not Verify Texas Export Sale – Tax & Accounting Blog

A retailer in Texas cannot rely on a form prepared through a smartphone app to prove that a sale was a foreign export. While an export is exempt from Texas sales tax, a retailer must prove a sale was an export to get a refund. Proof includes a valid export certification form prepared by a U.S. customs broker.  To be valid, the export certification form must be signed by the customer and the broker in each other’s presence.

Smartphone App Allows Information Exchange

Foreign customers can downloads an app that allows a U.S. customs broker to verify that its purchase is an export. The customer uploads information about its purchase in Texas to a server using the app. Through the app, the broker verifies the property purchased was exported. The app prepares an export certification form, which the broker then signs.

U.S. Customs Broker Involvement Required

However, Texas law does not allow an export certification form to be signed electronically. Further, using an app to verify an export violates the requirement that a customs broker must be involved in preparing, issuing and/ or signing an export certification form.

Letter No. 201710011L, Texas Comptroller of Public Accounts, October 19, 2017, ¶404-309

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Author: CCHTaxGroup

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