USA Texas sales tax and transfer pricing


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A Texas C corp in engaged in the business of buying auto parts from Texas and other states in the US and selling it to a related entity in United Arab Emirates which in turn sells it to buyers in other countries. Can the Texas corporation use a resale certificate and not pay sales tax on its purchases? Does it still have to file sales tax returns in Texas to report sales from it's wholesale activity?

Does Texas corporation have to collect sales tax on exports made to the related entity in United Arab Emirates?

Also, as long as the price of the goods sold by the Texas corporation to the related entity outside the United states is an arms-length transaction, is it in compliance?
 
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kirby

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When you read the Texas sales tax exemption certificate it says that the goods must be resold within either the US or Mexico.
 
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Thanks for the reply Kirby! I saw that too, which is what confused me initially.

I called up Texas today and was told that the corporation does not have to pay sales tax on purchases or collect sales tax on it's sales as the goods would be exported. Sales/use tax is based on the state where it will be used. Since the use will be outside of united states, I was told that as per Texas rules, there will be no sales or use tax involved.
 

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