Sales and Use Tax Exemptions for Diplomatic Personnel
PURPOSE: This Policy Statement indicates the extent to which, and the circumstances under which, sales made to diplomatic personnel and diplomatic missions are exempt from Connecticut sales and use taxes.
BACKGROUND: Under various treaties and federal statutes, the United States government has extended diverse tax benefits to diplomats, consuls, public international organizations and official foreign missions. Under the Supremacy Clause of the United States Constitution, treaties entered into by the United States are the supreme law of the land.
STATUTORY AUTHORITY: Conn. Gen. Stat. §12-412(2), U.S. Const. art. VI, cl. 2 and the treaties and statutes mentioned below.
EFFECTIVE DATE: Effective upon issuance.
SALES EXEMPT ONLY IF MADE TO HOLDER OF TAX EXEMPTION CARD ISSUED BY UNITED STATES DEPARTMENT OF STATE, OFFICE OF FOREIGN MISSIONS: Pursuant to authority granted to the Secretary of State by the Foreign Missions Act, and delegated by the Secretary of State to the Director of the Office of Foreign Missions, an office within the Department of State, the Office of Foreign Missions issues Tax Exemption Cards to qualified diplomatic personnel and missions stationed in the United States. These cards are valid nationwide and may be used at the point of sale by their holders to exempt their retail purchases from sales and use taxes.
TWO CLASSES OF CARDS: MISSION AND PERSONAL TAX EXEMPTION CARDS: There are two classes of tax exemption cards: one for personal purchases by qualified diplomatic personnel, and one for official mission purchases only by qualified diplomatic missions.
PERSONAL TAX EXEMPTION CARDS: The card issued to qualified diplomatic personnel for personal purchases is entitled "UNITED STATES DEPARTMENT OF STATE TAX EXEMPTION CARD" and bears the individual's name and a photograph of the individual to whom it has been issued.
MISSION TAX EXEMPTION CARDS: The card issued to qualified diplomatic missions is entitled "UNITED STATES DEPARTMENT OF STATE MISSION TAX EXEMPTION CARD" and bears the mission's name and a photograph of the representative authorized to make purchases on behalf of the mission. Mission Tax Exemption Cards are to be used only for official purchases of goods and services by the representative identified on the mission card. Because personal purchases with the Mission Card are prohibited, the representative identified on the card may not use his or her personal check to pay for exempt mission purchases; the mission must be the payer of record.
THREE LEVELS OF TAX EXEMPTION: BLUE, GREEN AND RED STRIPES: All Tax Exemption Cards bear identification data, a tax exemption number and an expiration date. In addition, Mission Cards and Personal Purchase Cards are blue-striped, green-striped or red-striped.
A blue-striped card entitles the holder to an exemption from Connecticut sales and use taxes on all purchases, including purchases of goods, services, meals and lodging.
A green-striped card entitles the holder to an exemption from Connecticut sales and use taxes except for the room occupancy tax (which is the sales tax imposed on the transfer of occupancy of a room in a hotel, motel, motor inn or similar accommodation).
A red-striped card entitles the holder to an exemption from sales and use taxes, including the room occupancy tax, on purchases over an amount stated on the Tax Exemption Card. The total of all items purchased in a single transaction must exceed the amount shown on the holder's card for any exemption to apply. When the amount of the transaction exceeds the minimum level, the entire amount is exempt. When the amount of the transaction does not exceed the minimum level, the entire amount is taxable.
Restrictions on tax-exemption privileges are imposed on holders of green-striped or red-striped cards because their governments impose similar restrictions on the tax-exemption privileges of United States diplomatic personnel and diplomatic missions. Retailers who make sales to holders of Office of Foreign Missions Tax Exemption Cards must carefully observe these restrictions.
PROCEDURES REQUIRED TO BE FOLLOWED BY RETAILERS:
The retailer must require the purchaser to present his or her Tax Exemption Card in order to verify that the purchaser is the holder of a card and that the card has not expired.
The retailer must verify that the purchase qualifies for exemption in accordance with the rules applicable to the class of card and the level of tax exemption.
The retailer must maintain adequate documentation of all sales made to holders of Tax Exemption Cards.
Any suspected misuse of any Tax Exemption Card within Connecticut should be reported by writing or telephoning :
Office of Foreign Missions (Tax Program)
United States Department of State
3407 International Place N.W.
Washington, D.C. 20008-3034
State of Connecticut Department of Revenue Services
Taxpayer Services Division
25 Sigourney Street
Hartford, Connecticut 06106
PURCHASES OF GASOLINE AND DIESEL MOTOR FUEL DISTINGUISHED: Holders of a Tax Exemption Card may not use their card to obtain exemption from the motor vehicle fuels tax collected by filling stations from purchasers of gasoline or diesel motor fuel, because diplomatic personnel or missions that are eligible to be issued Tax Exemption Cards may not be eligible for exemption from motor vehicle fuels tax. Filling stations may not sell gasoline or diesel motor fuel to holders of a Tax Exemption Card without collecting motor vehicle fuels tax on such fuel at the time of sale.
Qualified diplomatic personnel and missions obtain exemption, if at all, from motor vehicle fuels tax imposed on purchasers of gasoline or diesel motor fuel at filling stations as follows:
The Office of Foreign Missions, United States Department of State must have certified to a major oil company which is an issuer of credit cards that the diplomatic personnel or missions are qualified to obtain exemption from motor vehicle fuels tax.
The diplomatic personnel or missions must have been issued special "diplomat" credit cards by such oil company, and they must have used those special credit cards to purchase gasoline or diesel motor fuel.
The filling station will include the tax on the charge slip for the purchase.
The diplomatic personnel or missions then will be billed by the oil company for their purchases of gasoline or diesel motor fuel exclusive of the motor vehicle fuels tax from which they are exempt, even though the charge slip given to them by the filling station included such tax.
No exemption from motor vehicle fuels tax can be obtained unless diplomatic personnel or missions use the special "diplomat" credit cards issued to them by the major oil companies. Cash purchases or purchases made by using a credit card other than the special "diplomat" credit card do not qualify for tax exemption.
TREATIES AND FEDERAL STATUTES: The treaties upon which the Office of Foreign Missions Tax Exemption Program is based include the Vienna Convention on Consular Relations, 21 U.S.T. 77, T.I.A.S. No. 6820, 596U.N.T.S. 261 [entered into force with respect to the United States on December 24, 1969]; the Vienna Convention on Diplomatic Relations, 23 U.S.T. 3227, T.I.A.S. No. 7502, 500 U.N.T.S. 95 [entered into force with respect to the United States on December 13, 1972]; and the Convention on Privileges and Immunities of the United Nations, 21 U.S.T. 1420, T.I.A.S. No. 6900, 1 U.N.T.S. 16 [entered into force with respect to the United States on April 29, 1970].
The federal statutes upon which the Office of Foreign Missions Tax Exemption Program is based include the Act of Dec. 29, 1945, ch. 652, 59 Stat. 669 (codified as amended at 22 U.S.C. §288 et seq.); the Act of Aug. 4, 1947, ch. 482, 61 Stat. 756, reprinted in 1947 U.S. Code Cong. Serv. 754; the Diplomatic Relations Act, Pub. L. No. 95-393, 92 Stat. 808 (1978) (codified as amended at 22 U.S.C. §254a et seq.); and the Foreign Missions Act, Pub. L. No. 97-241, 96 Stat. 273, 282 (1982) (codified as amended at 22 U.S.C. §4301 et seq.).
EFFECT ON OTHER DOCUMENTS: The Notice to Retailers issued by the Department on January 3, 1986 concerning Tax Exemption Cards is superseded and may no longer be relied upon on or after the date of issuance of this Policy Statement.
EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. A Policy Statement indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.
Sales and use taxes