Tax Type
Retail Sales and Use Tax
Description
Government credit cards
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
06-22-1989
June 22, 1989
Re: Request for Ruling/Sales and Use Tax
Dear****************
This will reply to your letter of May 25, 1989 in which you request a ruling on the application of the Virginia Retail Sales and Use Tax to purchases made with U.S. Government commercial credit cards.
FACTS
The United States Government has contracted with the*************to provide Governmentwide commercial credit card services to all departments and wholly-owned Government corporations in the executive branch of the Federal Government. Under the program, Government VISA credit cards with the trademark protected name I.M.P.A.C. (International Merchant Purchase Authorization Card) and associated services will be available to civilian and military employees of the Federal Government for the purpose of making payments for purchases for official Government purposes only.
RULING
Virginia Code §58.1-608(18) provides an exemption from the sales and use tax for "tangible personal property for use or consumption by...the United States." As provided in Virginia Retail Sales and Use Tax Regulation 630-10-45, the tax does not apply to sales to the United States if payment is made directly by the Federal Government pursuant to required official purchase orders, i.e. by direct billing to the Government or by use of a Government credit card.
Therefore, since the I.M.P.A.C. card is identified as a U.S. Government credit card and can only be used for making purchases for official Government purposes, the exemption will apply to purchases made with the card, provided the credit card bill will be paid directly by the Federal Government.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner