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B-167150, APR 3, 1972

B-167150 Apr 03, 1972
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TURNER: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 11. DID NOT HAVE UNMARKED CARS AVAILABLE AND APPARENTLY THE USE OF A RENTAL CAR BY THE EMPLOYEE WAS EITHER AUTHORIZED OR APPROVED BY SBA. WHERE THE LEGAL INCIDENCE OF THE TAX IS ON THE VENDOR OF THE GOODS OR SERVICES TO THE UNITED STATES. THE CONSTITUTIONAL PRINCIPLE UNDER WHICH THE FEDERAL GOVERNMENT IS IMMUNE TO STATE TAXATION IS INAPPLICABLE. DOES NOT INFRINGE THE CONSTITUTIONAL IMMUNITY OF THE GOVERNMENT WHERE IT IS DETERMINED THAT THE GOVERNMENT IS NOT IN FACT THE "PURCHASER" WITHIN THE MEANING OF THE TAX STATUTE. IT IS CLEAR FROM THE RECORD THAT THE CAR INVOLVED HERE WAS NEITHER RENTED BY. RATHER THE CAR WAS RENTED BY A GOVERNMENT EMPLOYEE IN HIS OWN NAME AND THE TAX INVOLVED ATTACHED TO THAT TRANSACTION.

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B-167150, APR 3, 1972

REIMBURSEMENT OF TRAVEL EXPENSES - TAX UPON THE UNITED STATES CONCERNING WHETHER THAT PART OF AN EMPLOYEE'S TRAVEL VOUCHER WHICH REFLECTS A 3 PERCENT SALES TAX MAY PROPERLY BE CERTIFIED FOR PAYMENT AS A LEGAL OBLIGATION OF THE UNITED STATES. IN THE INSTANT CASE, A GOVERNMENT EMPLOYEE RENTED A CAR IN HIS OWN NAME AND THE GOVERNMENT'S OBLIGATION TO REIMBURSE THE EMPLOYEE DOES NOT RENDER THE PAYMENT OF HIS TRAVEL EXPENSES A TAX UPON THE UNITED STATES. 36 COMP. GEN. 681 (1957). ACCORDINGLY, THE VOUCHER MAY PROPERLY BE CERTIFIED FOR PAYMENT.

TO MR. WILLIAM C. TURNER:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 11, 1972, ENCLOSING A COPY OF AN EMPLOYEE'S TRAVEL VOUCHER AND REQUESTING OUR DECISION AS TO WHETHER OR NOT A 3 PERCENT SALES TAX REFLECTED IN THE VOUCHER MAY BE CERTIFIED FOR PAYMENT AS A LEGAL OBLIGATION OF THE UNITED STATES.

YOU STATE THAT AN EMPLOYEE OF THE SMALL BUSINESS ADMINISTRATION (SBA) REQUIRED THE USE OF AN UNMARKED AUTOMOBILE IN THE PERFORMANCE OF HIS DUTIES IN IN THE STATE OF WEST VIRGINIA. THE GENERAL SERVICES ADMINISTRATION AT CHARLESTON, WEST VIRGINIA, DID NOT HAVE UNMARKED CARS AVAILABLE AND APPARENTLY THE USE OF A RENTAL CAR BY THE EMPLOYEE WAS EITHER AUTHORIZED OR APPROVED BY SBA. THE RECORD DISCLOSES THAT THE EMPLOYEE RENTED A CAR IN HIS OWN NAME UTILIZING A PERSONAL CREDIT CARD. IN THE COURSE OF REVIEWING THE EMPLOYEE'S TRAVEL VOUCHER AND SUPPORTING RECEIPTS FOR CERTIFICATION AND PAYMENT, YOUR EXAMINER DISCOVERED A CHARGE FOR $1.74 BY THE CAR RENTAL AGENCY REPRESENTING THE 3 PERCENT WEST VIRGINIA SALES TAX.

IN ORDER TO BE EXEMPT FROM STATE TAXATION, THE GOVERNMENT MUST SHOW THAT THE LEGAL INCIDENCE OF THE PARTICULAR TAX INVOLVED FALLS DIRECTLY ON THE GOVERNMENT. WHERE THE LEGAL INCIDENCE OF THE TAX IS ON THE VENDOR OF THE GOODS OR SERVICES TO THE UNITED STATES, THE CONSTITUTIONAL PRINCIPLE UNDER WHICH THE FEDERAL GOVERNMENT IS IMMUNE TO STATE TAXATION IS INAPPLICABLE. SEE 32 COMP. GEN. 423 (1953); 33 ID. 453 (1954); AND 41 COMP. GEN. 719 (1962). FURTHERMORE, IT HAS BEEN HELD THAT A STATE SALES TAX, THE LEGAL INCIDENCE WHICH FALLS ON THE VENDEE (BUYER), DOES NOT INFRINGE THE CONSTITUTIONAL IMMUNITY OF THE GOVERNMENT WHERE IT IS DETERMINED THAT THE GOVERNMENT IS NOT IN FACT THE "PURCHASER" WITHIN THE MEANING OF THE TAX STATUTE. ALABAMA V. KING & BOOZER, 314 U.S. 1 (1941); UNITED STATES V BOYD, 378 U.S. 39 (1964).

IT IS CLEAR FROM THE RECORD THAT THE CAR INVOLVED HERE WAS NEITHER RENTED BY, OR IN THE NAME OF, THE UNITED STATES. RATHER THE CAR WAS RENTED BY A GOVERNMENT EMPLOYEE IN HIS OWN NAME AND THE TAX INVOLVED ATTACHED TO THAT TRANSACTION. THE FACT THAT THE GOVERNMENT MAY BE OBLIGATED TO REIMBURSE THE EMPLOYEE FOR HIS TRAVEL EXPENSES AND THEREBY ASSUME THE ECONOMIC BURDEN OF THE TAX IN QUESTION DOES NOT, IN OUR OPINION, MAKE IT A TAX UPON THE UNITED STATES. SEE 36 COMP. GEN. 681 (1957).

ACCORDINGLY, THE VOUCHER, AS ADMINISTRATIVELY APPROVED PLUS THE AMOUNT OF TAX, MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.

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