Tax Type
Retail Sales and Use Tax
Description
Government credit cards
Topic
Exemptions
Date Issued
11-16-1995
November 16, 1995
Re: Ruling Request: Retail Sales and Use Tax
Dear********************:
This will respond to your September 25, 1995 letter seeking tax-exempt status for official purchases made with government credit cards issued to employees of the************* (the Agency).
FACTS
The Agency is a federal agency which issues government credit cards, via a commercial bank, to government employees for official, pre-approved purchases only. The Agency's employees are not responsible for payments of any purchases made with these cards. Rather, billings are sent directly to the government for payment using public funds; thus in all instances, the government's credit is directly bound to each purchase. Cards will be printed with the legend******* Tax-Exempt" on their face and the individual employee's name which is indicated only for purposes of the Agency's internal accounting procedures. Government regulations prohibit personal use of the cards and charges are closely monitored to ensure compliance with such regulations.
RULING
The department has previously ruled that when a credit card is identified as a U. S. government credit card for use only in making official government purchases, the government exemption from the retail sales and use tax granted under Code of Virginia § 58.1-609.1(4) 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 Agency's credit cards will enjoy an exemption from the tax provided the credit card bills are paid directly by the federal government.
If you have any additional questions, please contact**********at***********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10289R
Rulings of the Tax Commissioner