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The Freeport and Goods in Transit Exemptions

Sections 11.251, 11.437 and 11.253, Tax Code and Article 8, Sec. 1-j of the Texas Constitution

Section 11.251 of the Tax Code provides for a freeport exemption applying to goods, wares, ores and merchandise other than oil, gas and petroleum products (defined as liquid and gaseous materials immediately derived from refining petroleum or natural gas) and to aircraft or repair parts used by a certificated air carrier. The freeport goods qualify if they leave Texas within 175 days from the date they are brought into or acquired in the state.

However, for cotton stored in a warehouse to qualify for the freeport exemption, Section 11.437 provides that the warehouse operator may file a one-time application for the exemption. Property qualifies as freeport goods whether or not the person who transports it out of the state was the person who owned the property on Jan. 1. Taxing units may elect to tax the goods notwithstanding the above.
View Application Form 50-113 (PDF)

Section 11.253 provides an exemption for “goods in transit”, described as goods acquired inside or outside the state, detained at a facility in which the owner of the goods has no direct or indirect ownership of the facility, detained for storing purposes by the person who acquired or imported the property, and then shipped to another location in or out of this state within 175 days. The goods do not include oil, gas or petroleum products or special inventories such as motor vehicles or boats in a dealer’s retail inventory. Taxing units may elect to tax the goods notwithstanding the above.
View Application Form 50-758 (PDF)

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