1. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Employee--A person who is authorized by his employer to perform customs transactions or related services on behalf of the employer, is compensated by the employer with a regular salary or wages, is under the direct control and supervision of the employer, and from whose salary or wages the employer is required to and actually does deduct and withhold a tax under federal law. This definition applies to employees of customs brokers and employees of verification contractors.
   2. (2) Licensed customs broker--A person who is licensed by the United States Customs Service to act as a custom house broker and who holds a Texas Customs Broker's License issued by the comptroller as provided for in this section.
   3. (3) Verification contractor--An independent contractor who, for consideration and under a written contract with a licensed customs broker, facilitates the monitoring of exports to be certified by the broker. Unless the context clearly indicates otherwise, all references in this section to a verification contractor include an employee of a verification contractor.
2. (b) Certification of exports. Only a licensed customs broker or an employee of a licensed customs broker may fully or partially prepare, issue, and/or sign a valid export certification form as provided for in this section and in §3.323 of this title (relating to Imports and Exports).

3. (c) Texas Customs Broker's License; prerequisites. A person may apply to the comptroller for a Texas Customs Broker's License, which is a license to issue export certification forms for the purpose of claiming exemption from Texas sales and use taxes. To obtain a license, a person must:

   1. (1) be currently licensed by the United States Customs Service to act as a custom house broker;
   2. (2) submit an application in the form prescribed by the comptroller; and
   3. (3) be current in payment of all taxes and fees administered by the comptroller.

4. (d) Form of application. The comptroller will prescribe an application form for a Texas Customs Broker's License, which must include or be accompanied by the following:

   1. (1) a copy of the applicant's license to act as a custom house broker issued by the United States Customs Service;
   2. (2) the applicant's name, mailing address, primary business address, business telephone number, home address, and home telephone number, and the names, home addresses, and home telephone numbers of all the general partners (if the applicant is a partnership), the charter number, charter date, federal employers identification number, and the names, home addresses, and home telephone numbers of the officers and directors (if the applicant is a corporation), or the names, home addresses, and home telephone numbers of the members (if the applicant is an association other than a partnership or corporation);
   3. (3) the names, mailing addresses, primary business addresses, business telephone numbers, home addresses, and home telephone numbers of all verification contractors and all authorized employees of verification contractors, and the names, home addresses, and home telephone numbers of all the general partners (if the verification contractor is a partnership), the charter number, charter date, federal employers identification number, and the names, home addresses, and home telephone numbers of the officers and directors (if the verification contractor is a corporation), or the names, home addresses, and home telephone numbers of the members (if the verification contractor is an association other than a partnership or corporation), and the date of contract of all verification contractors;
   4. (4) the names, home addresses, and home telephone numbers of all employees who are authorized to certify exports in the name of the applicant and the date of hire of all such employees;
   5. (5) a copy of each authorized employee's power of attorney to certify exports in the name of the applicant;
   6. (6) the trade name of the applicant's business and the address of each location where export certifications are to be fully or partially prepared;
   7. (7) the original signature or signatures of the applicant (if he is a sole proprietor), an officer or director (if the applicant is a corporation), all general partners (if the applicant is a partnership), or an authorized member (if the applicant is an association other than a corporation or partnership), and the original signatures of all employees of the broker;
   8. (8) the social security number of each employee, verification contractor, authorized employee of a verification contractor, and the social security number of the applicant (if he is a sole proprietor), each general partner (if the applicant is a partnership), each officer and director (if the applicant is a corporation), or each member (if the applicant is an association other than a partnership or corporation); and
   9. (9) any other information the comptroller requires.
5. (e) Duration of license. A license issued under this section continues in effect until canceled by the broker or suspended or revoked by the comptroller. All canceled, suspended, or revoked licenses must be immediately returned to the comptroller or they will be subject to confiscation.
6. (f) Display of license. An original Texas Customs Broker's License must be prominently displayed at each place of business of the broker where export certification forms are fully or partially prepared.
7. (g) Locations outside the United States. No Texas Customs Broker's Licenses will be issued for locations beyond the territorial limits of the United States.
8. (h) Verification contractors. A licensed customs broker may enter into a written contract with a verification contractor to facilitate the monitoring of exports certified by the broker. A verification contractor may authorize by power of attorney his full- or part-time employee to perform verification services on his behalf. A verification contractor may not fully or partially prepare, issue, and/or sign export certification forms and may not affix export certification stamps to export certification forms. A verification contractor's contract must be submitted to and approved by the comptroller, prior to which the verification contractor may not perform valid export verification services described in this subsection.

9. (i) Export certification stamps. The comptroller will produce or have produced export certification stamps to be affixed to export certification forms.

   1. (1) The comptroller may change the design as often as necessary for the enforcement of this section. The design will be changed at least once each calendar quarter.
   2. (2) Only a licensed customs broker or his authorized employee may receive stamps. A person obtaining stamps in person must present photographic identification.
   3. (3) There is no fee for the stamps.
   4. (4) The stamps are non-transferable. A stamp is void if transferred to a person other than the broker to whom the comptroller originally issued the stamp or to that broker's employee in the ordinary course of business. This subdivision does not apply to a stamp that is actually affixed to an export certification form that is transferred in compliance with this section.
   5. (5) All unused, expired stamps must be returned to the comptroller within 15 working days of the end of each calendar quarter. All such stamps must be delivered to the comptroller on the same date, at the same time, and at the same location of the comptroller. Unused stamps must be immediately returned to the comptroller upon cancellation, suspension, or revocation of the broker's license or upon notification that the broker is out of business and may be confiscated if not returned. Unused, expired stamps may not be retained, destroyed, or disposed of except by the comptroller.
   6. (6) As soon as practicable after discovery, a broker must report in writing to the comptroller the theft, destruction, or other loss of stamps issued to the broker, including the numbers assigned to the lost stamps (if the comptroller has numbered the stamps sequentially).
   7. (7) A broker must notify the comptroller as soon as practicable in writing if the broker has no remaining inventory of stamps following use, theft, and/or other loss of the stamps.

10. (j) Records required. A licensed customs broker must maintain books and records that include, at a minimum, the following:

    1. (1) an exact photographic image, including the exact photographic image of the export certification stamp, of each export certification form signed by the broker within the last two years (but not before January 1, 1993). Carbon copies and pages from multi-page forms are acceptable in lieu of photocopies, provided the number of the export certification stamp affixed to the original is recorded on the additional copies;

    2. (2) a ledger that:

       1. (A) lists sequentially all export certification forms issued or voided within the last two years (but not before January 1, 1993);
       2. (B) identifies the person or persons who fully or partially prepared, issued, and/or signed each form; and
       3. (C) identifies the person's or persons' relationship to the licensed customs broker;
    3. (3) an inventory of export certification stamps and records tracking transfers of stamps between the broker and his employees, identifying the recipients and showing the dates of transfer, quantities transferred, the sequential numbers of the transferred stamps (if the comptroller has numbered the stamps sequentially), and detailed records regarding stamps that have been lost, stolen, or are otherwise unaccounted for;
    4. (4) a current list of all employees authorized to fully or partially prepare, issue, and/or sign export certification forms and information relating to the hiring and termination of employees;
    5. (5) all contracts executed between the broker and verification contractors and information relating to the termination or cancellation of such contracts;
    6. (6) exact copies of all invoices, receipts, or other documents relating to property whose export the broker has certified. This requirement applies only if the broker attached such copies to the original form as provided in subsection (m)(5) of this section;
    7. (7) a copy of a certified check, company check, or money order made payable to the purchaser, or a credit memo or cash receipt signed by the purchaser, and the purchaser's written assignment of the right to a Texas sales or use tax refund for each instance in which the broker obtained a refund assignment from the purchaser;
    8. (8) detailed records showing the amount the broker charges clients for his export certification services and the broker's gross receipts from certifying exports; and
    9. (9) information of the exact same type as required to be submitted with the application for a license as described in subsection (d) of this section, updated and kept current since the date of application.
11. (k) Examination of records. A licensed customs broker must maintain all required records available for examination by the comptroller. The comptroller will issue written notice of routine examination of records at least 15 days prior to the date of examination. No advance notice will be issued if the comptroller determines that notice could jeopardize the proper enforcement of the tax laws and the comptroller's rules. The examination will take place at the broker's principal place of business unless the comptroller agrees to examine the records at another location.
12. (l) Retention of records. A licensed customs broker must retain records for a period of at least two years from the date of the document, the date of completion (if the required record is a contract), or the date of final entry (if the required record is a list or ledger). Copies of export certification forms must be retained for at least two years after the date the broker or the broker's employee signs the form, regardless of the date of export. For other documents with multiple dates, the two-year period for retention begins on the latest date reflected on the document.

13. (m) Export certification form and contents. The export certification forms issued by a licensed customs broker must be substantially in the form recommended by the comptroller. A separate form must be completed for each seller. Multiple invoices from a single seller may be listed on a single export certification form only if all the listed items were exported at the same place, on the same date, and at the same time. The required information must be completed in English on the face of the form, in addition to any other language in which the form is completed. The comptroller may immediately confiscate from any person an export certification form that is incomplete on its face, indecipherable, fraudulent, or otherwise in violation of this section. An export certification form must, at a minimum, reflect the following information:

    1. (1) the name and address of the purchaser of the property, as shown on the invoice, receipt, or similar document;
    2. (2) the name of the seller and the seller's location from which the property was sold;
    3. (3) the name, address, and Texas Customs Broker's License number of the broker in whose name the export is being certified;
    4. (4) the date of sale, date and time the property was exported, and exact location (e.g., the bridge or airport) where the property was exported;
    5. (5) a description of the property, a list of Store Keeping Unit (SKU) or other product identification codes, or copies of invoices securely attached to the form and signed and dated individually by the broker or the broker's authorized employee;
    6. (6) the invoice numbers (if any) and sales prices of the property;
    7. (7) the original signature of the licensed customs broker or the broker's employee, together with a certification that the property has been exported;
    8. (8) the name of the person who signed the form, typed or legibly printed near the signature;
    9. (9) a valid export certification stamp whose expiration date falls within the same calendar quarter as the date of export (regardless of the date of sale); and
    10. (10) a sequential export certification form number assigned by the licensed customs broker.

14. (n) License denial, suspension, and revocation. The comptroller may deny, suspend, or revoke a Texas Customs Broker's License for cause.

    1. (1) Grounds for denying a person's application for a Texas Customs Broker's License include, but are not limited to:

       1. (A) ineligibility for a license under subsection (c) of this section, including filing incomplete, false, or misleading information with the license application;
       2. (B) disqualification for a license due to prior denial, suspension, or revocation, as provided in this subsection; or
       3. (C) forfeiture of corporate privileges, certificate of authority, or charter, if the applicant is a corporation.
    2. (2) A person whose application for a Texas Customs Broker's License has been denied may resubmit the application not sooner than 90 days after the date on which the comptroller's decision to deny the application becomes final. However, the comptroller may authorize reapplication at an earlier date if he determines it is warranted under the circumstances.

    3. (3) Acts or omissions of a licensed customs broker, his employee, his verification contractor, an officer or director, a general partner, or association member (as applicable) that constitute cause for suspension or revocation of a license under this section include, but are not limited to:

       1. (A) cancellation, suspension, or revocation by the United States Customs Service of the broker's license to act as a custom house broker or cancellation of that license by the broker;
       2. (B) violation of any provision of the Tax Code or the comptroller's rules;
       3. (C) delivering to any person a signed and/or stamped export certification form if all or a portion of the property described thereon was not actually exported at the time and place and on the date reflected on the certification form;

       4. (D) delivering to any person a signed and/or stamped export certification form based solely on:

          1. (i) foreign import documents, bills of lading, freight forwarder's receipts, or other documents that constitute valid proof of export in and of themselves under §3.323 of this title (relating to Imports and Exports); or
          2. (ii) proof of foreign citizenship;
       5. (E) transferring an export certification stamp to a person other than the licensed customs broker or the broker's employee, except if, at the time of transfer, the stamp is affixed to an export certification form issued in compliance with this section;
       6. (F) delivering to any person an export certification form with knowledge that the recipient intends to use the form to evade tax that is legally due or to assist another person in the evasion of tax that is legally due;
       7. (G) soliciting, advertising, or promoting the unlawful evasion of tax through use of export certification forms;
       8. (H) knowingly making a false verbal or written statement to the comptroller;
       9. (I) fully or partially preparing export certification forms at a location for which no Texas Customs Broker's License has been issued;
       10. (J) transferring signed and/or stamped export certification forms that are otherwise blank or incomplete at the time of transfer to a person other than the licensed customs broker or the broker's employee in the ordinary course of business;
       11. (K) failing to exercise responsible supervision and control over the conduct of export certification business, including inadequate supervision of employees and verification contractors;
       12. (L) failing to keep current in a correct, orderly, and itemized manner the records required under this section, failing to timely provide the comptroller with information required to be provided, or failing to account for all export certification stamps received from the comptroller;
       13. (M) refusing the comptroller access to, concealing, removing, or destroying without the comptroller's prior, written consent, the whole or any part of a record required to be kept under this section, or refusing to cooperate with the comptroller's investigation;
       14. (N) attempting to unduly influence the comptroller by the use of a threat, false accusation, duress, or the offer of any special inducement or promise of advantage, or by bestowing any gift, favor, or other thing of value;
       15. (O) withholding information from or knowingly imparting false information to a client;
       16. (P) failing to timely return to the comptroller unused, expired export certification stamps as required by this section, absent a showing and timely report to the comptroller of loss by theft or accident;
       17. (Q) selling or buying export certification forms and/or export certification stamps except as consistent with this section;
       18. (R) seeking and/or obtaining under false pretenses a tax refund from a seller, including giving a false refund assignment to the seller or otherwise representing that the broker has the authority to obtain a refund of tax paid by another person if the broker does not have such authority, in fact; or
       19. (S) failing promptly to notify the seller, in writing, that an export certification form relating to that seller is for any reason incomplete, misleading, void, or otherwise invalid.
    4. (4) After notice and hearing, the comptroller may suspend a license for no fewer than 60 days and no more than 120 days if the broker's license has not been previously suspended or revoked, for no fewer than 120 days and no more that 180 days if the broker's license has been previously suspended or revoked, or concurrently and for the same length of time as a suspension by the United States Customs Service of the broker's license to act as a custom house broker. The suspension becomes effective on the date the comptroller's decision to suspend the license becomes final. Suspension of a license applies to all locations of the broker.
    5. (5) After notice and hearing, the comptroller may revoke a broker's license indefinitely if the broker's license has been suspended at least twice previously or has been previously revoked, or if the broker's license to act as a custom house broker has been revoked by the United States Customs Service. The revocation becomes effective on the date the comptroller's decision to revoke the license becomes final. Revocation of a license applies to all locations of the broker.
    6. (6) A Texas Customs Broker's License that has been suspended is reinstated automatically upon the expiration of the period of suspension, unless the licensee notifies the comptroller in writing that the license should not be reinstated. Not sooner than one year after the effective date of revocation, a person whose Texas Customs Broker's License has been revoked may apply to the comptroller for reinstatement. The comptroller may reinstate the license if the person otherwise qualifies for a license as provided in this section and the comptroller is satisfied that the person has a good faith intent to comply with the tax laws and the comptroller's rules.
    7. (7) For procedures relating to license denial, suspension, and revocation, see §3.361 of this title (relating to Practice and Procedure for Texas Customs Broker's License Denial, Suspension, and Revocation).
15. (o) Suggested form of certification. A suggested form for the Licensed Customs Broker's Export Certification is set out as follows.

Source Note:The provisions of this §3.360 adopted to be effective March 6, 1995, 20 TexReg 1272.