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B-206804-O.M. 1 (1983-02-07)

handle is hein.gao/gaobadtfk0001 and id is 1 raw text is: UNITED STATES GOVERNMENT GENERAL ACCOUNTING OFFICE, Memorandum TO Director, GS&C -Richard L. Brown FROM Acting General Counsel - Harry A. Van Cleve SUBJECT: Use of Tax Exempt Number, B-206804-O.M. Assistant Chief Judith B. Czarsty asked us whether your Procurement- Branch (OAS) may legally obtain a tax exempt number to use in connection with small authorized purchases on the open market. We have no legal objection to the proposed procedure. The Federal Government is statutorily exempt from sales taxes in the District of Columbia (D.C. Code S 47-2005(1)) and in Virginia (Va. Code S 58-441.6(p)). The sales tax exemption in Maryland applies to sales which are not.within the taxing power of Maryland under the United States Constitution. Md. Ann. Code, Art. 81, § 326(f).. Some jurisdic- tions allow a purchaser to avoid sales tax on a transaction by reciting an assigned tax exempt number to evidence the statutory or other exemrp- tion. Where this can be accomplished, there may be measurable savings to the Government. Current procedure calls for the GAO purchaser to obtain a tax exempt certificate for each outside purchase. Because of the expense bf prepar- ing and processing the certificates, GAO policy is to prepare a certifi- cate only for purchases on which the tax will exceed $10.00. 7 GAO Policy and Procedures Manual S 26.2 (1974). Other ways of demonstrating entitlement to the exemption are use of Governmeqt credit cards and pur- chase orders/billing letters (41 Comp. Gen. 560 41962)) instead of cash for purchases. However, some cash purchases are inevitably made because exemption certificates are limited to larger purchases. Thus the Govern- ment often ends up paying sales tax on its smaller retail purchases. B-128043, May 22, 1975. The use of a tax exempt number might alleviate this problem, resulting in appreciable savings as well as convenience. It therefore appears to be a salutary change. You also asked whether there are any restrictions on the oral com- munication of the tax exempt number to employees who may be required to make purchases. We know of no such restrictions, but the issuance and uses of tax exempt numbers are governed exclusively by state regula- tions. Each time you apply for a number, you should request copies of all applicable state regulations. You should thoroughly familiarize all staff who may use the number with the regulations governing its use.

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