Tax Type
Retail Sales and Use Tax
Description
Government transactions; Government credit cards
Topic
Taxability of Persons and Transactions
Date Issued
04-12-1994
April 12, 1994
Re: Request for Ruling: Retail Sales & Use Tax
Dear**********
This will reply to your letter of March 18, 1994 in which you request a ruling on the tax status of purchases made with government credit cards.
FACTS
The United States government has entered into a new contract with the ********* to provide government wide commercial credit card services to the federal government. Under the new contract, I.M.P.A.C. VISA cards will be issued to government employees for official purposes only and the bills will continue to be paid directly by the government. The new cards will contain specific numbers to identify them as federal government credit cards and will be printed with the legend "U.S. Government Tax Exempt" and "For Official Use Only" on their face.
You seek a ruling as to whether the department will continue to allow purchases made with the I.M.P.A.C. cards to be made exempt from the tax.
DETERMINATION
The department ruled in P.D. 89-184 (6/22/89) that since the I.M.P.A.C. card was identified as a U.S. government credit card and was for use only in making official government purchases, the government exemption from the sales and use tax (subdivision 4 of Va. Code §58.1-609.1) would apply to purchases made with the card provided the credit card bill was paid directly by the federal government. Likewise, purchases made with the new I.M.P.A.C. cards will enjoy an exemption from the tax provided the credit card bills are paid directly by the federal government.
Sincerely,
Danny M. Payne
Acting Tax Commissioner
OTP/7781H
Rulings of the Tax Commissioner