Source: https://cao.gov/content/part-29-taxes
Timestamp: 2019-03-19 16:48:55
Document Index: 451696259

Matched Legal Cases: ['art 29', 'art 29', 'art 29', 'art 29', 'art 29', 'art.\n29', 'art 29', 'arts 40']

Part 29 - Taxes | Acquisition.GOV
HomePart 29 - Taxes
Subpart 29.1 - General
Subpart 29.2 - Federal Excise Taxes
Subpart 29.3 - State and Local Taxes
29.300 Scope of subpart.
29.301 [Reserved]
29.302 Application of State and local taxes to the Government.
29.304 Matters requiring special consideration.
Subpart 29.4 - Contract Clauses
29.401 Domestic contracts.
29.401-2 Construction contracts performed in North Carolina.
29.401-4 New Mexico gross receipts and compensating tax.
29.402 Foreign contracts.
29.402-1 Foreign fixed-price contracts.
29.402-2 Foreign cost-reimbursement contracts.
This part prescribes policies and procedures for (a)using tax clauses in contracts (including foreign contracts), (b)asserting immunity or exemption from taxes, and (c)obtaining tax refunds. It explains Federal, State, and local taxes on certain supplies and services acquired by executive agencies and the applicability of such taxes to the Federal Government. It is for the general information of Government personnel and does not present the full scope of the tax laws and regulations.
(b) To keep treatment within an agency consistent, contracting officers or other authorized personnel shall consult the agency-designated counsel before negotiating with any taxing authority for the purpose of-
(a) Federal excise taxes are levied on the sale or use of particular supplies or services. SubtitleD of the Internal Revenue Code of1954, Miscellaneous Excise Taxes, 26 U.S.C.4041, etseq., and its implementing regulations, 26 CFR parts 40 through 299, cover miscellaneous federal excise tax requirements. Questions arising in this area should be directed to the agency-designated counsel. The most common excise taxes are-
(a) The exclusive use of any State or political subdivision, including the District of Columbia (26 U.S.C.4041 and 4221).
(b) Shipment for export to a foreign country or an outlying area of the United States. Shipment must occur within 6 months of the time title passes to the Government. When the exemption is claimed, the words “for export” must appear on the contract or purchase document, and the contracting officer must furnish the seller proof of export (see 26 CFR48.4221-3).
(d) Use as fuel supplies, ships or sea stores, or legitimate equipment on vessels of war, including (1)aircraft owned by the United States and constituting a part of the armed forces and (2)guided missiles and pilotless aircraft owned or chartered by the United States. When this exemption is to be claimed, the purchase should be made on a tax-exclusive basis. The contracting officer shall furnish the seller an exemption certificate for Supplies for Vessels of War (an example is given in 26 CFR 48.4221-4(d)(2); the IRS will accept one certificate covering all orders under a single contract for a specified period of up to 12 calendar quarters) (26 U.S.C.4041 and 4 221).
(e) A nonprofit educational organization (26 U.S.C.4041 and 4 221).
(f) Emergency vehicles (26 U.S.C.4053 and 4 064(b)(1)(c)).
(a) Pursuant to 26 U.S.C.4293, the Secretary of the Treasury has exempted the United States from the communications excise tax imposed in 26 U.S.C.4251, when the supplies and services are for the exclusive use of the United States. (Secretarial Authorization, June20,1947, Internal Revenue Cumulative Bulletin,1947-1, 205.)
(a) Generally, purchases and leases made by the Federal Government are immune from State and local taxation. Whether any specific purchase or lease is immune, how-ever, is a legal question requiring advice and assistance of the agency-designated counsel.
(a) With coordination of the agency-designated counsel, a contract may (1)state that the contract price includes or excludes a specified tax or (2)require that the contractor take certain actions with regard to payment, nonpayment, refund, protest, or other treatment of a specified tax. Such special treatment may be appropriate when there is doubt as to the applicability or allocability of the tax, or when the applicability of the tax is being litigated.
(c) Indefinite-delivery contracts for equipment rental may require the contractor to furnish equipment in any of the States. Since leased equipment remains the contractor’s property, States and local governments impose a wide variety of property, use, or other taxes on equipment leased to the Government. The amount of these taxes can vary considerably from jurisdiction to jurisdiction. See 29.401-1 for the prescription of the contract clause to be included in contracts when delivery points are not known at time of contracting.
(2) The Act provides that, to receive the refund, claimants must file, within 6 months after the claimant’s fiscal year closes, a written request substantiated by such records, receipts, and information as the Commissioner of Revenue may require. No refund will be made on an application not filed within the time allowed and in such manner as the Commissioner may require. The requirements of the Commissioner are set forth in regulations that provide that, to substantiate a refund claim for sales or use taxes paid on purchases of building materials, supplies, fixtures, or equipment by a contractor, the Government must secure from the contractor certified statements setting forth the cost of the property purchased from each vendor and the amount of sales or use taxes paid. In the event the contractor makes several purchases from the same vendor, the certified statement must indicate the invoice numbers, the inclusive dates of the invoices, the total amount of the invoices, and the sales and use taxes paid. The statement must also include the cost of any tangible personal property withdrawn from the contractor’s warehouse stock and the amount of sales or use tax paid by the contractor. Similar certified statements by subcontractors must be obtained by the general contractor and furnished to the claimant. Any local sales or use taxes included in the contractor’s statement must be shown separately from the State sales or use taxes.
(3) The clause prescribed at 29.401-2 requires contractors to submit to contracting officers by November30 of each year a certified statement disclosing North Carolina State and local sales and use taxes paid during the 12-month period that ended the preceding September30. The contracting officer shall ensure that contractors comply with this requirement and shall obtain the annual refund to which the Government may be entitled. The application for refund must be filed each year before March31 and in the manner and form required by the Commissioner of Revenue. Copies of the form may be obtained from the-
PO Box 25000 Raleigh,
North Carolina 27640.
Insert the clause at 52.229-1 , State and Local Taxes, in solicitations and contracts for leased equipment when-
The contracting officer shall insert the clause at 52.229-2 , North Carolina State and Local Sales and Use Tax, in solicitations and contracts for construction to be performed in North Carolina. If the requirement is for vessel repair to be performed in North Carolina, the clause shall be used with its AlternateI.
(a) Except as provided in paragraph (b) of this section, insert the clause at 52.229-3, Federal, State, and Local Taxes, in solicitations and contracts if-
“Services,” as used in this subsection, is as defined in the Gross Receipts and Compensating Tax Act of the State of New Mexico, Sec 7-9-3(k) NM SA1978, and means all activities engaged in for other persons for a consideration, which activities involve predominately the performance of a service as distinguished from selling or leasing property. “Services” includes activities performed by a person for its members or shareholders. In determining what is a service, the intended use, principal objective or ultimate objective of the contracting parties shall not be controlling. “Services” also includes construction activities and all tangible personal property that will become an ingredient or component part of a construction project. Such tangible personal property retains its character as tangible personal property until it is installed as an ingredient or component part of a construction project in New Mexico. However, sales of tangible personal property that will become an ingredient or component part of a construction project to persons engaged in the construction business are sales of tangible personal property.
(1) The agencies listed below have entered into an agreement with the State of New Mexico to eliminate the double taxation of Government cost-reimbursement contracts when contractors and their subcontractors purchase tangible personal property to be used in performing services in whole or in part in the State of New Mexico and for which title to such property will pass to the United States upon delivery of the property to the contractor and its subcontractors by the vendor. Therefore, the clause applies only to solicitations and contracts issued by the-
United States Defense Advanced Research Projects Agency;
(a) The contracting officer shall insert the clause at 52.229-6, Taxes-Foreign Fixed-Price Contracts, in solicitations and contracts expected to exceed the simplified acquisition threshold when a fixed-price contract is contemplated and the contract is to be performed wholly or partly in a foreign country, unless it is contemplated that the contract will be with a foreign government.
(b) The contracting officer shall insert the clause at 52.229-7, Taxes-Fixed-Price Contracts with Foreign Governments, in solicitations and contracts that exceed the simplified acquisition threshold when a fixed-price contract with a foreign government is contemplated.
(a) The contracting officer shall insert the clause at 52.229-8, Taxes-Foreign Cost-Reimbursement Contracts, in solicitations and contracts when a cost-reimbursement contract is contemplated and the contract is to be performed wholly or partly in a foreign country, unless it is contemplated that the contract will be with a foreign government.
(b) The contracting officer shall insert the clause at 52.229-9, Taxes-Cost-Reimbursement Contracts with Foreign Governments, in solicitations and contracts when a cost-reimbursement contract with a foreign government is contemplated.
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