Effective Date: January 1, 1999

Re: Sales Tax Exempt Purchases by Federal, State, and Local Governments

The purpose of this Tax Bulletin is to inform vendors when a purchase qualifies for the sales tax exemption for purchases made by federal, state, or local government entities. Please note that this Tax Bulletin supersedes Tax Bulletins 14-94 and 6-89 in whole, and Tax Bulletin 16-94 in part.

Purchases by the Federal Government

The following credit card purchases qualify for the exemption from sales tax for purchases by the federal government:

(1) U.S. government fleet purchases made with Voyager credit cards that begin with the numbers 8699 or MasterCard credit cards that begin with the numbers 5568;

(2) U.S. government purchases, other than fleet or travel purchases, made with VISA and MasterCard credit cards with a prefix of 4486, 4716, or 5568;

(3) U.S. government travel purchases made with VISA and MasterCard credit cards with a prefix of 4486, 4716, or 5568 AND with a sixth digit of either 0, 6, 7, 8, or 9.

A purchase made with a credit card that does not meet the numbering scheme outlined above does NOT qualify for the sales tax exemption.

In addition, purchases made by federal government check, purchase order, or voucher are exempt from Utah sales tax.

While vendors are required to maintain evidence that a purchase qualifies for the sales tax exemption as a sale to the federal government, this requirement is satisfied if the vendor maintains a record of the qualifying credit card number, or a copy of the federal government check, purchase order, or voucher. If one of these forms of verification is not available, the vendor is required to obtain form TC-721, Exemption Certificate, completed by the purchaser, as evidence that the sale qualifies for the exemption.

Purchases by Utah State and Utah Local Government Entities

A purchase qualifies for the sales tax exemption for purchases made by state and local governments (including school districts) if the purchaser:

(1) makes payment by state or local government (including school district) check, purchase order, or voucher; or

(2) regardless of the amount of the purchase, provides a copy of form TC-721, Exemption Certificate, properly completed and signed, at the time of the transaction. (This provision supersedes language in Tax Bulletin 16-94 that required state government entities and schools making purchases in excess of $100 to produce a check, purchase order, or voucher at the time of sale.)

If a purchaser is unable to provide the evidence required above, the sale does NOT qualify for the sales tax exemption for purchases made by a state or local government entity, and the vendor shall collect sales tax at the time of transaction.

Vendors that make exempt sales to state and local governments are required to keep a record of the state or local government check, purchase order, voucher, or form TC-721 as evidence that the sale qualifies for the sales tax exemption.

The sales tax exemption for purchases by state and local government entities does NOT apply to purchases by a state other than Utah or to purchases by a local government entity located outside of Utah.

To ask questions about this Tax Bulletin, please call Taxpayer Services at (801) 297- 2200 or call toll-free 1-800-662-4335. To submit questions in writing, mail to Taxpayer Services, 210 North 1950 West, Salt Lake City, UT 84134. Those who have impaired hearing may call the Telecommunications Device for the Deaf (TDD) at (801) 297-2020.