EXCISE TAX EXEMPTION ON PURCHASES - 3585

The State is exempt from the payment of Federal Excise Taxes, except for the purchase of retreaded tires and transportation of persons or property by air.  This tax is normally billed as a "concealed tax" in the price of the merchandise; hence, it is the exclusive responsibility of any person authorized to sign an order on the part of the State to see that this is not paid. This is done by filing an exemption certificate with the order. (The Exemption Certificate, STD. 802, is available from Department of General Services, Office of Procurement, Material Services Section.) At the same time, write across the face of the order, "Exemption Certificate Attached" and write on the Exemption Certificate the number of the order or sub- purchase order.

To find out what is normally subject to tax and the percentage of tax, refer to the "Scope of Tax" list. Then ask your supplier if his price includes excise tax. If so, determine the amount and deduct this from the price to establish the cost of the material less tax.

On purchases where the excise tax amounts to less than $0.50 (total) made from small dealers or merchants who are unfamiliar with the means by which they can obtain reimbursement, do not claim exemption. This also applies where automotive repairs are made in conjunction with the purchase of automotive parts and a State discount is allowed by the selling garage. However, a small merchant who does business with the State on a "repeat" basis on items subject to excise tax should be familiar with how he is able to get a refund by turning in the Exemption Certificate. If in doubt, contact the nearest office of the Office of Procurement for advice.

SCOPE OF TAX

Excise taxes are imposed by the Internal Revenue Code. The rates of tax now in effect are shown by the following list: