Tax Type
Retail Sales and Use Tax
Description
Purchases by federally chartered bank
Topic
Exemptions
Date Issued
08-19-1987
August 19, 1987
Re: Request for Ruling/Sales and Use Tax
Dear ********************
This will reply to your letter of June 25, 1987, in which you request a ruling on the application of the sales and use tax to purchases by the *********************.
Pursuant to *********** the Agreement Establishing the ********************* ("Bank"), to which the United States is a signatory, the bank is "immune from all taxation" and "immune from any obligation relating to the payment, withholding or collection of any tax." Based on the foregoing international agreement, the bank is not subject to the sales and use tax on articles that it purchases out of its own funds.
It must be noted, however, that purchases by employees of the bank for their own use or consumption are subject to the tax. The tax applies in such instances even though the employee may be reimbursed for his expenses by the bank. Only in the event that purchases are billed directly to the bank or payment is made directly by the bank (such as with a credit card issued in the name of the bank) will such purchases be exempt. I have enclosed a copy of Virginia Regulation 630-10-45.A, which describes how the tax applies to the United States government and its employees. This regulation should be helpful as the guidelines set forth therein apply equally to employees of the bank.
Copies of this letter may be furnished to the bank's vendors as evidence that it is exempt from the sales and use tax. Please feel free to contact the department if further questions arise.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner