The Purchasing Card, presented to vendors by any state agency employee, is recognizable by several characteristics. The state also issues several Diners Club cards. There is also a Diners Club Travel card issued by the state. All of this information serves as confirmation to vendors that purchases made on the purchasing card and the Diners Club Group Event System card should be accepted and considered exempt from state and state-collected sales tax. The billing for tax exempt government credit card purchases is sent directly to the state agency which then makes the payment directly to the credit card company.
Some local governments issue credit cards in both the government employee's and agency's name.
In many instances the bill is directly paid by the local government agency. Purchases are then tax exempt. It can be difficult for vendors to determine the tax exempt status of these cards. The government agency can present a letter on government letterhead to the vendor as a way to verify that the purchase is for government purposes and will be paid by the government agency. This would help vendors determine the taxability of the transaction.