Skip to comments.[Texas:]Program That Refunds Sales Tax To Mexican Shoppers Could Change
Posted on 11/24/2010 8:27:44 AM PST by SwinneySwitch
EL PASO, Texas -- Federal law allows international shoppers to get a refund on the sales tax they pay with the understanding that the merchandise is going back to the foreign country the shopper is from.
But one state representative says Mexican nationals are abusing the current system, costing the city and state millions of dollars.
Texas is the only state in the nation that allows "manifiestos" without having to prove the merchandise has been delivered to Mexico. Manifiestos allow Mexican shoppers to take their store receipts to a U.S. customs broker, where they must complete a declaration form, called a manifiesto.
Now, with the ongoing drug war and more Mexican nationals moving here, State Rep. Chente Quintanilla said he wants that revenue to stay here as well.
The manifiesto program allows mexicans shopping in Texas to a full rebate on the sales taxes they pay on merchandise bought here if they take the goods back to Mexico with them. Then they can return to the store where they bought the merchandise to get the sales tax back.
"Some of this stuff is not going across the border," Quintanilla said.
Quintanilla suggests changing manifiestos to work similar to duty free shops.
"They package it and go deliver it to you to the border," Quintanilla said. "They give it to you as you cross the border and that's what we should be doing with everything else."
But that would mean a costly delivery charge to retailers.
"In other words, JC Penney would have to get a bunch of people and say, 'you're a Mexican citizen, when you get ready to go we'll send that carrier and deliver these goods to you at the border,'" said Quintanilla.
Blanca Rojo, who operates under a customs broker's license and charges a small fee to file the manifiesto, is skeptical about the proposed change.
"UETA is across the bridge, but are you going to move Dilliard's, Sunland Park mall over to the bridge?" Rojo said. "Because it's going to be expensive for the stores," said Rojo.
Rojo said the proposed bill wouldn''t only affect local retailers but businesses like hers which are already hurt by the economic downturn.
"It was two or three more business next to me, next to this warehouse for manifiestos, they're not, " said Rojo.
Rojo said Mexican nationals are the reason many retailers are still viable and disagrees with Quintanilla's proposal.
"I think he's taking care of the pennies and losing the dollars," said Rojo.
Actually, $1.2 million dollars to be exact that the city of El Paso loses every year to sales tax rebates.
"That's a lot of money the state of Texas is refunding back to Mexican citizens," said Quintanilla.
The Texas comptrollers office licenses customs brokers and are in charge of audits and random inspections of the 167 customs offices throughout the state.
"We have met the enemy, and he is us." Pogo
Tax the citizens, use that money for illegals and foreign nationals...the Cloward-Piven strategy is running full steam.
Yet, when I was a smoker and bought my cigarettes in Missouri and brought them back to Illinois to smoke, Illinois wanted me to pay Illinois tax on them, the same for the liquor tax.
If you want on, or off this S. Texas/Mexico ping list, please FReepMail me.
This is just like the “farm use” tax exemptions you can get at Tractor Supply. If 1/10 of that stuff is actually being used for productive farming I’ll eat one of those snazzy flannel shirts they’re selling there.
If I were standing in line behind a Mexican national who skated on sales tax which I would then have to pay, I’d be pretty p*ssed off. Same as I do when some farmer ahead of me does it at TSC.
Basically, ALL states that have a Sales and Use Tax do this. The Sales Tax rate and the Use Tax rate are exactly the same. Many states leave it to the citizen to come forward.
When an item is purchased in Missouri and not exported (by the retailer) then Missouri sales tax is due. When the customer takes possession and brings the item(s) into another state (Illinois) then Illinois Use Tax is due.
Say, for this example, Missouri sales tax is 6% and Illinois tax is 7% then the individual would owe Illinois the additional 1%. However if the Illinois tax is less than the Missouri tax there is no refund.
Been that way for decades.
If you want on, or off this S. Texas/Mexico ping list, please FReepMail me.
About 5 years ago, I received a form along with my Illinois income tax form that came in the mail. They asked me to list all liquor and tobacco purchases made in another state. I threw away the form and never heard another word about it, nor did they send me that form any more.
At the time, I was a smoker and did purchase all my cigarettes in Missouri, where they were much cheaper and it was convenient for me as I made several trips per year to Missouri anyway.
I bought several cartons at a time but from the day I got that form from the state, I always paid cash for my Missouri cigarettes.
Another point I might add was that the retailer where I bought my cigarettes in Missouri had a sign on the counter that stated, “limit 3 cartons per purchase”. I asked about it and the clerk told me that they were required to put up that sign but indeed he would sell me as many as I wanted to buy.
Some may say, “tax evasion”, I prefer to call it, “tax avoidance”.
Many states only send forms to registered individuals/businesses. On the same form or possibly an accompanying form is the Use Tax accrual ability.
Most states I’ve dealt with treat the paying of Use Tax as voluntary by their citizens. Though in times of budget shortfalls, new tactics may be used by the state tax authorities.
What outrageous crap! How come a Mexican pays no sales tax on an item that a Texan has to pay sales tax on? This never should have been enacted in the first place. All people should have to pay the sales tax. Why should Texans (American citizens) subsidize the purchases of Mexicans?
Of course Mexicans living in America are going to dodge this tax. Even Mexican Americans will who can scarf up some BS Mexican ID such as a matricula consular card
It's probably more than that. This from one of the commenters at that site:
"I am glad this issue is being brought to light by State Rep. Quintanilla, I worked retail for several years and saw how Mexican Nationals and customs brokers would manipulate the system. I recall on several occasions where Mexican Nationals would come in with their "Manifestos" for product paid for on order, when the law states the product must be exported prior to getting their sales tax back.
I also [saw] them come in with receipts for purchases they had not made, basically they would have family member give them receipts for large purchases and they would cash in on the sales tax by doing a Manifesto. I don't understand why the city amd state have not cracked down on this type of fraud."
The Sales Tax rate and the Use Tax rate are exactly the same. Many states leave it to the citizen to come forward.
Except New York State, where they have a giant data mining operation underway trying to identify credit card purchases you have made online or at out-of-state malls. I have talked with IT consultants who have actually worked on this project. They openly referred to it as “Eliot Spitzer’s Wet Dream”.
As times change and states see more budget short-falls I suspect others will try that too.
I have been involved in the State and Local Tax arena for almost 30 years now. Like other things in life the pendulum swings and different tactics take sway and hold.
I believe it will become more common place as the technology and the various legislatures look for ways to ‘plug’ the large holes in their budget.
They can not go on forever just ‘raising’ the rate or widening the net to catch other items/services.
“Some of this stuff is not going across the border,” Quintanilla said..)I would guess more like at least 90% is not going back to Mexico. If Mexican Bandits see
something of value, you are then a moving target for a shakedown
I’m trying to understand the logic of refunding the sales tax to them just because they take it out of the state anyway. So what?
Helping the imbalance of trade?
Last I looked, we were -$5 Billion a month with Mexico.
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