Court Opinion

ID: 3792712
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:39:05.108455+00
Date Added: 2024-06-11T13:50:17.830512
License: Public Domain

Red Cross — Sales Tax — Exemption Sales to the American National Red Cross and its chapters in Oklahoma are exempt from state sales tax under 68 O.S. 1305 [68-1305] (1968).  The Attorney General has considered your request of June 14, 1968. You inquire: "Are proceeds from sales to the American National Red Cross and its Chapters in Oklahoma exempt from the Oklahoma Sales Tax?" The Oklahoma state sales tax, 68 O.S. 1301 [68-1301] (1967) et seq., is generally in the form of a levy on "the gross proceeds or gross receipts derived from all sales to any person" of tangible personal property and other commodities and services enumerated in the statute. See Section 68 O.S. 1304 [68-1304]. Section 68 O.S. 1305 [68-1305] enumerates exemptions and in sub-section (i), it exempts "sales to the United States Government." In Department of Employment v. United States,385 U.S. 355, 17 L.Ed.2d 414, 87 S.Ct. 464, the United States Supreme Court considered the question of the imposition by the State of Colorado of an unemployment compensation tax on the Colorado chapter of the American National Red Cross. The Red Cross objected to the imposition of the tax on the basis that it was a federal instrumentality, thus immune. In affirming the trial court, the Court said: "On the merits, we hold that the Red Cross is an instrumentality of the United States for purposes of immunity from state taxation levied on its operations, and that this immunity has not been waived by congressional enactment. Although there is no simple test for ascertaining whether an institution is so closely related to governmental activity as to become a tax-immune instrumentality, the Red Cross is clearly such an instrumentality. See generally, Sturges, The Legal Status of the Red Cross, 56 Mich L Rev 1 (1957). Congress chartered the present Red Cross in 1905, subjecting it to governmental supervision and to a regular financial audit by the Defense, then War, Department. 33 Stat 599, as amended, 36 U.S.C.A. 1 et seq. Its principal officer is appointed by the President, who also appoints seven (all government officers) of the remaining 49 Governors.33 Stat 601, as amended, 36 U.S.C.A. 5 . By statute and Executive Order there devolved upon the Red Cross the right and the obligation to meet this Nation's commitments under various Geneva Conventions, to perform a wide variety of functions indispensable to the workings of our Armed Forces around the globe, and to assist the Federal Government in providing disaster assistance to the States in time of need. Although its operations are financed primarily from voluntary private contributions, the Red Cross does receive substantial material assistance from the Federal Government. And time and time again, both the President and the Congress have recognized and acted in reliance upon the Red Cross' status virtually as an arm of the Government." The reasoning of the Department of Employment v. United States, supra, decision is as applicable to a sales tax as it is to an unemployment compensation tax. This decision leaves little doubt as to the tax immunity status of the American National Red Cross and its various chapters as federal instrumentalities. American National Red Cross v. Department of Employment, 263 F. Supp. 581, aff'd 385 U.S. 355, 17 L.Ed.2d 414, 87 S.Ct. 464. The Attorneys General of Virginia and Louisiana agree with this analysis.  Therefore, it is the opinion of the Attorney General that sales to the American National Red Cross and its chapters in Oklahoma (as instrumentalities of the United States Government) are exempt from the Oklahoma state sales tax.  (Brian H. Upp)