Program That Refunds Sales Tax To Mexican Shoppers Could Change

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..