[Payment of South Dakota Sales Tax on Furnishing of Electricity]

The Corps of Engineers requested an advance decision as to whether the Corps may pay a voucher for sales tax applied against electricity charges by a State public utility. The public utility had billed the Corps for electricity furnished pursuant to a contract between the two parties and for the sales tax applied against the electricity bill. State law imposes a tax on the gross receipts from sales, furnishings, or service of electricity when sold to consumers or users. GAO has held that, when the legal incidence of a State tax falls on a vendor, the United States, as purchaser, is not immune from bearing the financial burden of that tax. Accordingly, the Corps is subject to and can pay the State sales tax.