200810193L




October 2, 2008

************
************
************

RE:  08164353 Temporary Storage

************:

Thank you for your e-mail about sales tax, and please accept my apologies for 
the lateness of this response.  Your question is restated below, followed by 
our response.

Your company operates in the United States and in Mexico.  Your facility in 
Mexico is a maquiladora, and it purchases material from vendors in various 
states.  Some of the material purchased in the U.S. may be purchased from Texas 
vendors, but the majority of material purchased in the U.S. is purchased from 
vendors in states other than Texas.

Material purchased in the U.S. is shipped to a freight forwarder in 
************, Texas.  The freight forwarder receives, processes, and 
immediately exports it to the maquiladora in Mexico.  On a daily basis, the 
freight forwarder processes high volumes of material for the maquiladora 
ranging from whole trailer loads to less than truck loads.  The freight 
forwarder may also consolidate a number of small shipments into a larger single 
export shipment.

You wish to know if the intent of a maquiladora export permit is to exempt from 
Texas sales tax only the material purchased in Texas for export to Mexico.  
That is, you wish to know if it can be applied, as well, to exempt from Texas 
sales tax the purchase of material made in states other than Texas, but shipped 
to a Texas freight forwarder for export to Mexico.

Response:
Yes, the maquiladora exemption can be applied as well, to exempt from Texas 
sales tax the purchase of material made in states other than Texas, but shipped 
to a Texas freight forwarder for export.  Texas Administrative Code Rule 
3.358(e) applies to both Texas sellers and out-of-state sellers as follows:

(e)  “Tax-free purchases.  A maquiladora export permit holder may make tax-free 
purchases of goods for export to Mexico.”

I hope this information answers your question.  A complete set of rules, the 
entire text of the Tax Code and other valuable information is available on our 
Web site at www.window.state.tx.us.

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

If you need more information, please call toll-free at (800) 531-5441, or you 
may e-mail us at tax.help@cpa.state.tx.us.

Our goal is to provide you with prompt, professional service.  Please take a 
moment to complete our on-line survey at:
http://aixtcp.cpa.state.tx.us/surveys/tpsurv2/index.html.

Sincerely,


Jody Frierson
Tax Policy Division
Texas Comptroller of Public Accounts
P.O. Box 13528
Austin, Texas 78711-3528
(512) 475-0701




Issue:
Whether a Maquiladora can utilize a Maquiladora Exemption Certificate as Proof 
of Export for purposes of claiming exemption from Texas Sales Tax on materials 
purchased in the United States and shipped to a freight forwarder in Texas for 
immediate export to Mexico.

Law:
Texas Administrative Code Title 34, Part 1, Chapter 3, Subchapter O, State 
Sales and Use Tax, Rule 3.358(b)(1) States in part: Any maquiladora enterprise 
wishing to make tax-free purchases in Texas for export to Mexico may apply to 
the comptroller for a maquiladora export permit

Texas Administrative Code Title 34, Part 1, Chapter 3, Subchapter O, State 
Sales and Use Tax, Rule 3.323(c) relating to Exports states in part that: When 
an exemption is claimed because tangible personal property is exported beyond 
the territorial limits of the United States, proof of export may be shown only 
by:

(D) a copy of the original airway, ocean, or railroad bill of lading issued by 
a licensed and certificated carrier that describes the property being exported 
and a copy of the air forwarder's, ocean forwarder's, or rail freight 
forwarder's receipt if an air, ocean, or rail freight forwarder takes 
possession of the property in Texas; or

(E) A maquiladora exemption certificate issued by an organization of the type 
defined in Section 3.358 of this title (relating to Maquiladoras). The 
maquiladora must also provide a copy of its maquiladora export permit issued by 
the comptroller.

Facts:
COMPANY operates in the United States and in Mexico. Our facility in Mexico is 
a Maquiladora and it purchases material from vendors in various states. Some of 
the material purchased in the U.S. may be purchased from Texas vendors but the 
majority of material purchased in the U.S. is purchased from vendors in states 
other than Texas.

Material purchased in the U.S. is shipped to a freight forwarder in 
************, TX. The Freight Forwarder receives, processes, and immediately 
exports it to the Maquiladora in Mexico. On a daily basis the Freight Forwarder 
processes high volumes of material for the Maquiladora ranging from whole 
trailer loads to less than truck loads. The freight forwarder may also 
consolidate a number of small shipments into a larger single export shipment. 

Question:
Since Rule 3.358(1) states “A Maquiladora wishing to make purchases in Texas 
may apply to the comptroller for a maquiladora export permit”.  We request 
further explanation on Texas Sales Tax policy as to whether the intent of a 
“maquiladora export permit” is to exempt from Texas Sales Tax only the material 
purchased in Texas for export to Mexico, or can it be applied as well to exempt 
from Texas Sales Tax the purchase of material made in states other than Texas 
but shipped to a Texas freight forwarder for export to Mexico?

Your prompt attention to this matter is appreciated. If possible I remain 
available to discuss this further by telephone at ************. Thank You.



************
Senior Tax Analyst
************




ACCESSION NUMBER: 200810193L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 10/02/2008
TAX TYPE: SALES