B-181795, NOV 11, 1974

B-181795: Nov 11, 1974

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REIMBURSEMENT MAY NOT BE MADE SINCE TAX IS A BUSINESS PRIVILEGE TAX. THE TAX IS NOT ASSESSED ON A CASUAL SALE OF PREVIOUSLY OCCUPIED HOME AND. IS NOT A TRANSFER TAX WITHIN THE MEANING OF SECTION 2-6.2D OF FEDERAL TRAVEL REGULATIONS. THE REGULATION PROHIBITS REIMBURSEMENT OF EXPENSES THAT ARE ASSOCIATED ONLY WITH CONSTRUCTION OF A RESIDENCE. TREAT WAS TRANSFERRED FROM THE ABERDEEN PROVING GROUND. TREAT WAS ADVISED BY A LETTER FROM MR. THE TAX IS LEVIED ON A NEWLY CONSTRUCTED HOME SOLD BY A CONTRACTOR. WHICH IS TRANSFERRED THROUGH A "CASUAL" SALE BY A PRIVATE INDIVIDUAL. PAYMENT OF TRAVEL AND RELOCATION EXPENSES OF ARMY CIVILIAN GOVERNMENT EMPLOYEES WAS GOVERNED JOINTLY BY PARAGRAPH C8352-LD.

B-181795, NOV 11, 1974

CIVILIAN EMPLOYEE OF WHITE SANDS MISSILE RANGE SEEKS REIMBURSEMENT OF NEW MEXICO GROSS RECEIPTS AND COMPENSATING TAX LEVIED IN CONNECTION WITH HIS PURCHASE OF A NEWLY-CONSTRUCTED RESIDENCE INCIDENT TO TRANSFER. REIMBURSEMENT MAY NOT BE MADE SINCE TAX IS A BUSINESS PRIVILEGE TAX, THE TAX IS NOT ASSESSED ON A CASUAL SALE OF PREVIOUSLY OCCUPIED HOME AND, THEREFORE, IS NOT A TRANSFER TAX WITHIN THE MEANING OF SECTION 2-6.2D OF FEDERAL TRAVEL REGULATIONS, FPMR 101-7. ADDITIONALLY, THE REGULATION PROHIBITS REIMBURSEMENT OF EXPENSES THAT ARE ASSOCIATED ONLY WITH CONSTRUCTION OF A RESIDENCE.

MR. CLYDE TREAT--RELOCATION EXPENSES-TAXES:

THIS MATTER INVOLVES A REQUEST FOR OUR ADVANCE DECISION SUBMITTED BY AN AUTHORIZED CERTIFYING OFFICER, CIVILIAN PERSONNEL OFFICE, WHITE SANDS MISSILE RANGE, DEPARTMENT OF THE ARMY, CONCERNING THE PROPRIETY OF REIMBURSING A CIVILIAN EMPLOYEE, MR. CLYDE J. TREAT, FOR THE NEW MEXICO "SALES TAX" THAT HE PAID WHEN HE PURCHASED A NEW HOME INCIDENT TO HIS TRANSFER TO THE WHITE SANDS MISSILE RANGE.

BY TRAVEL ORDER NUMBER WSM 4 0370, AUGUST 30, 1973, MR. TREAT WAS TRANSFERRED FROM THE ABERDEEN PROVING GROUND, MARYLAND, TO WHITE SANDS MISSILE RANGE. INCIDENT TO THIS TRANSFER HE PURCHASED A NEW HOME WITH THE SETTLEMENT OCCURRING ON APRIL 11, 1974. MR. TREAT WAS ADVISED BY A LETTER FROM MR. ROBERT L. GRANDLE OF GRANDLE-KISER, INC., THAT THE PURCHASE PRICE OF HIS NEW HOME INCLUDED A "SALES TAX" OF $1,990.35. WHEN MR. TREAT SUBMITTED HIS "APPLICATION FOR REIMBURSEMENT OF EXPENSES INCURRED BY DOD CIVILIAN EMPLOYEE UPON SALE OR PURCHASE (OR BOTH) OF RESIDENCE UPON CHANGE OF DUTY STATION" (DD FORM 1705), UNDER 5I., "SALES OR TRANSFER TAXES; MORTGAGE TAX, IF ANY," HE LISTED THE AMOUNT OF THE "SALES TAX" THAT HE PAID. AS THE CERTIFYING OFFICER POINTS OUT, THE TAX IS LEVIED ON A NEWLY CONSTRUCTED HOME SOLD BY A CONTRACTOR, BUT NOT ON A HOME THAT HAS PREVIOUSLY BEEN OCCUPIED, WHICH IS TRANSFERRED THROUGH A "CASUAL" SALE BY A PRIVATE INDIVIDUAL.

AT THE TIME OF MR. TREAT'S TRANSFER, PAYMENT OF TRAVEL AND RELOCATION EXPENSES OF ARMY CIVILIAN GOVERNMENT EMPLOYEES WAS GOVERNED JOINTLY BY PARAGRAPH C8352-LD,PART H, OF THE JOINT TRAVEL REGULATIONS AND BY THE FEDERAL TRAVEL REGULATIONS, FPMR 101-7, MAY 1973. SECTION 2-6.2D OF THE LATTER REGULATION PROVIDES, IN PERTINENT PART:

"MISCELLANEOUS EXPENSES. THE FOLLOWING EXPENSES ARE REIMBURSABLE WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL STATION OR IF THEY ARE CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY PAID IN THE LOCALITY OF THE RESIDENCE: *** MORTGAGE AND TRANSFER TAXES, *** IN CASES INVOLVING CONSTRUCTION OF A RESIDENCE, REIMBURSEMENT OF EXPENSES WOULD INCLUDE THOSE ITEMS OF EXPENSE WHICH ARE COMPARABLE TO EXPENSES THAT ARE REIMBURSABLE IN CONNECTION WITH THE PURCHASE OF EXISTING RESIDENCES AND WILL NOT INCLUDE EXPENSES WHICH RESULT FROM CONSTRUCTION."

IF THE TAX PAID BY MR. TREAT CAN BE CLASSIFIED AS A TRANSFER TAX, IT MAY BE REIMBURSABLE UNDER THE REGULATIONS.

IN DECISION B-171877, AUGUST 8, 1974, 54 COMP. GEN. , WE CONSIDERED WHETHER A TRANSFERRED EMPLOYEE COULD BE REIMBURSED THE AMOUNT OF THE NEW MEXICO "SALES TAX" UNDER CIRCUMSTANCES SIMILAR TO THOSE IN THIS CASE. DETERMINED THAT THE TAX LEVIED UNDER NEW MEXICO STATUTES ANNOTATED, SECTION 72-16A-1, ET SEQ., IS A BUSINESS PRIVILEGE TAX AND NOT A "TRANSFER TAX" WITHIN THE MEANING OF SECTION 2-6.2D OF FPMR 101-7 AND, THEREFORE, IT NOT REIMBURSABLE. IN THAT DECISON WE ALSO STATED THEREFORE, IS NOT REIMBURSABLE. IN THAT DECISION WE ALSO STATED, IN PART, THE FOLLOWING:

"AS NOTED ABOVE, THE TAX INVOLVED HERE WILL NORMALLY ONLY BE ASSESSED INCIDENT TO THE PURCHASE OF A NEWLY CONSTRUCTED RESIDENCE. IN FPMR 101 7, SECTION 2-6.2D, IT IS SPECIFICALLY STATED THAT IN A CASE INVOLVING CONSTRUCTION OF A NEW RESIDENCE, ONLY THOSE COSTS THAT WOULD ALSO BE INCLUDED IN THE PURCHASE OF AN EXISTING RESIDENCE MAY BE REIMBURSED. ANY EXPENSES RESULTING FROM CONSTRUCTION MAY NOT BE REIMBURSED. ***"

IN THE INSTANT CASE, THE "PRIVILEGE TAX" WAS ASSESSED AGAINST THE CONTRACTOR THAT BUILT THE HOUSE. MOREOVER, IT WAS A CHARGE INCIDENT TO THE CONSTRUCTION OF A NEW RESIDENCE ONLY. THEREFORE, IT IS NOT REIMBURSABLE. ACCORDINGLY, MR. TREAT'S CLAIM MAY NOT BE CERTIFIED FOR PAYMENT.