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                             September 4, 1997
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                             GSBCA 14095-RELO


                     In the Matter of KEVIN R. McLANE


     Kevin R. McLane, Rehoboth, DE, Claimant.

     J. Stephen Turett, Comptroller, Central Security Service,
National Security Agency, Fort George G. Meade, MD, appearing for
Department of Defense.

DeGRAFF, Board Judge.

     An employee who relocated to a new duty station and purchased
a boat as his new residence can be reimbursed for the expense of an
excise tax that he paid to the state, because the tax is a transfer
tax and is not a property tax.  The employee may not be reimbursed
for the entire amount he paid in excise taxes, because the total
amount of expenses for which the agency may reimburse him is
limited to five percent of the purchase price of his new residence.

     Kevin R. McLane is employed by the National Security Agency
(NSA).  In late 1993, Mr. McLane transferred from California to
Maryland, and NSA agreed to reimburse him for the expenses he
incurred in purchasing a residence at his new duty station.  In
late 1995, Mr. McLane paid $60,000 for a boat to be used as his new
residence.  Mr. McLane purchased the boat in Maryland.  NSA
reimbursed Mr. McLane for some of the expenses he incurred in
connection with the purchase of the boat, but not for these
expenses:



     Taxes                                        $3,000.00
     Engine survey                                   721.02
     Captain s fee/sea trial                         180.00
     Dockage and lines                               276.50
     Legal/related costs
          USCG filing fee for documentation          108.00
          Administrative fees for preparing
                    documentation paperwork          350.00
          Federal Express charges                     42.00

     Mr. McLane paid the $3,000 in taxes to the Maryland Department
of Natural Resources.  As stated in Mr. McLane s receipt, the tax
was an excise tax.  The Maryland statutes refer to this tax as a
 title tax,  and explain that the tax is levied upon obtaining a
Maryland title to a vessel, upon the sale of a vessel within
Maryland, or upon possession within Maryland of a vessel purchased
outside the state to be used principally in Maryland.  The excise
tax is collected in lieu of a sales tax.  Md. Code Ann., Nat. Res.,
 8-701(o), 8-716 (Supp. 1996).

     NSA contacted an employee of the Maryland Department of
Natural Resources who said that the excise tax is a property tax
and is not a transfer tax.  Because applicable regulations permit
NSA to reimburse transferred employees for transfer taxes, and
prohibit reimbursing transferred employees for property taxes, NSA
did not reimburse Mr. McLane for the $3,000 he claimed.  41 CFR
302-6.2(d) (1994).  Mr. McLane asked us to review NSA's decision. 

     The issue presented by Mr. McLane s claim is whether the
excise tax that he paid is a property tax or a transfer tax for
purposes of the regulations governing the relocation of federal
government employees.  The characterization of the tax by an
employee of the Maryland Department of Natural Resources is not
conclusive, because the employee was not looking at the excise tax
in light of the federal regulations and is not charged with
applying these regulations.  The General Accounting Office (GAO),
which formerly resolved the claims of relocated employees, decided
that a sales tax required to be paid by a relocated employee in
connection with the purchase of a mobile home was a transfer tax,
and was therefore reimbursable.  GAO reached this conclusion
because the tax was levied on the purchase transaction, and not on
the property itself, and because paying the tax was a necessary
incident to purchasing the mobile home for use as a residence. 
Jerry D. Brite, B-196527 (Dec. 29, 1980); Howard B.G. Kittredge,
B-190484 (Feb. 14, 1978); Gerald M. Houts, B-189377 (Feb. 13,
1978); Clyde W. Myers, B-187056 (Nov. 24, 1976).  The sales tax in
these cases was unlike a property tax, which is levied incident to
the ownership of property.  

     GAO s analysis is a good one and we will use it here. 
Maryland collected the excise tax in lieu of a sales tax, and did
not levy the tax incident to Mr. McLane's ownership of the boat. 
Maryland levied the excise tax on the transaction -- the purchase
of the boat in Maryland -- and not on the boat itself.  Mr. McLane
had to pay the excise tax in order to purchase the boat.  The tax,
which is denominated in Maryland s statutes as a title tax and an
excise tax, and not as a property tax, is a transfer tax and is,
therefore, reimbursable.

     In connection with the purchase of the new residence, the
maximum amount of relocation expenses for which Mr. McLane can be
reimbursed is five percent of the purchase price of his new
residence.  41 CFR 302-6.2(g).  Mr. McLane paid $60,000 for his
houseboat, which means that he can be reimbursed for up to $3,000. 
Our file does not clearly establish the amount that NSA has already
reimbursed Mr. McLane.  NSA should reimburse him for the excise tax
that he paid in connection with the purchase of his boat, so that
the total amount of the reimbursement for relocation expenses
equals $3,000.  Because Mr. McLane cannot be reimbursed for any
more than $3,000, we do not need to determine whether Mr. McLane is
otherwise eligible to be reimbursed for the additional expenses
listed above.




                                   _______________________________
                                   MARTHA H. DeGRAFF
                                   Board Judge