Diplomatic Sales Tax Exemption Cards
The Department’s Office of Foreign Missions (OFM) issues diplomatic tax exemption cards to eligible foreign missions and their accredited members and dependents on the basis of international law and reciprocity. These cards facilitate the United States in honoring its host country obligations under the Vienna Convention on Diplomatic Relations (VCDR), Vienna Convention on Consular Relations (VCCR), and other treaties to provide relief from certain taxes.
The cards provide point-of-sale exemption from sales tax and other similarly imposed taxes throughout the United States. At the time of payment when making a purchase, the cardholder must present the card to the vendor in person. The vendor may verify the card’s validity online or by calling OFM during business hours. The vendor should retain a copy of the front and back of the card for accounting and reporting purposes.
Types of Sales Tax Exemption Cards
Mission Tax Exemption Cards
Diplomatic tax exemption cards that are labeled as “Mission Tax Exemption – Official Purchases Only” are used by foreign missions to obtain exemption from sales and other similarly imposed taxes on purchases in the United States that are necessary for the mission’s operations and functions. All purchases must be paid for with a check, credit card, or wire transfer transaction in the name of the foreign mission.
OFM will only issue mission tax exemption cards to an individual who (i) is a principal member or employee of the mission, (ii) holds an A or G series visa (and in the case of a G series visa holder, is a diplomatic agent), and (iii) is not considered to be “permanently resident in” the United States for purposes of the VCDR and VCCR. This person’s photo will appear on the card and is the mission’s point of contact. This individual, however, does not need to be present when purchases are made in the name of the mission.
Personal Tax Exemption Cards
Diplomatic tax exemption cards that are labeled as “Personal Tax Exemption” are used by eligible foreign mission members and their dependents to obtain exemption from sales and other similarly imposed taxes on personal purchases in the United States. The card must be used solely for the benefit of the individual identified and pictured on the card. The card is not transferable and cannot be loaned to any other person, regardless of that person’s eligibility for exemption from taxation. There is no restriction on the form of payment that can be used with the card.
Eligibility for personal tax exemption cards is determined on a case-by-case basis, but the following individuals are generally entitled to apply for a card, if they are neither U.S. nationals nor permanently resident in the United States for purposes of the VCDR or VCCR:
• individuals accredited as diplomatic agents, members of the administrative and technical staff, consular officers, and consular employees;
• the members of their families forming part of their households, but in the case of a child: those aged 18-21 years, or aged 18-23 years if accredited as a justified student.
Other personnel may also be eligible to apply for a card if they qualify based on a treaty other than the VCDR or VCCR.
*Note that employees (and their dependents) of international organizations and the Permanent Missions to the United Nations and Organization of American States who have been granted the privileges and immunities accorded to diplomatic agents are eligible for personal tax exemption cards. These unrestricted personal tax exemption cards facilitate the United States in honoring its obligations under relevant treaties to provide relief from certain taxes.
Levels of Exemption
Not all missions and personnel hold diplomatic tax exemption cards, and missions and personnel holding cards may have varying levels of tax exemption privileges authorized on the card. This level of exemption is set by OFM on the basis of reciprocity, determined by the tax relief privileges enjoyed by the U.S. Mission and personnel in that foreign country. Foreign missions interested in discussing improvements to their tax exemption benefits are encouraged to contact OFM.
The cards contain text on the front and back of the card that indicate the level of exemption authorized for the cardholder. Some cards authorize an unrestricted exemption from sales taxes, and other cards authorize an exemption with some degree of restriction, such as a minimum purchase requirement, excluded categories, or both.
In addition to the specific text, each tax exemption card bears one of four animal symbols indicating the specific type of tax exemption of the cardholder:
• Owl: mission tax exemption cards with unrestricted tax exemption.
• Buffalo: mission tax exemption cards with some degree of restriction.
• Eagle: personal tax exemption cards with unrestricted tax exemption.
• Deer: personal tax exemption cards with some degree of restriction.
Types of Purchases Permitted and Not Permitted
Diplomatic tax exemption cards can generally be used to obtain exemption in person and at point-of-sale from sales taxes and other similarly imposed taxes on purchases of most goods and services, hotel stays, and restaurant meals in the United States. For specific policies and procedures concerning using official and personal tax exemption cards for hotel stays and lodging, missions and personnel should refer to the Department’s note No. 13-619, dated July 19, 2013.
Tax exemption cards may not be used for exemption from taxes imposed on purchases of motor vehicles, gasoline/diesel fuel, utility services, airline tickets, or cruises. Various resources are available to authorize these diplomatic tax exemptions.
Furthermore, because the nature of purchases made via the internet or by telephone does not allow for the presentation of the tax exemption card to the vendor, the card cannot be honored in such transactions. OFM is unable to provide any assistance to foreign missions or their members in obtaining an exemption or reimbursement of taxes charged on purchases not made in-store.
State-specific Rules, including Streamlined Sales Tax Agreement
U.S. states and territories typically enact statutes and/or regulations or issue other guidance concerning the manner in which vendors in that state or territory must account for the diplomatic tax exemption in its records. OFM continues its efforts to ensure that tax authorities in all states and territories issue guidance supporting the diplomatic tax exemption card program so that vendors will appropriately extend a tax exemption with confidence.
Some U.S. states require their vendors to retain additional documentation in addition to a copy of the tax exemption card. For example, certain states require foreign missions and their members to complete a streamlined sales tax agreement exemption certificate. OFM has compiled relevant state guidance on its website. This may be particularly useful for foreign mission members who are traveling and expect to use the tax exemption card outside of their usual jurisdiction.
OFM Assistance with Refunds or Rejections
Missions and their members should encourage vendors to verify the card’s validity online or by calling OFM during business hours. If a vendor is not familiar with the diplomatic tax exemption card program, they should be encouraged to visit the OFM website and especially OFM’s online resources, which provide relevant state-specific guidance; or e-mail OFM for more information about the program. OFM regularly communicates with vendors to educate them about the program.
If the transaction occurs after OFM business hours, and the vendor does not accept the card, OFM will attempt to assist the mission or member in obtaining refunds of improperly imposed taxes (if more than a de minimis amount) by speaking to the vendor, but a refund cannot be guaranteed.
How to apply for a Tax Exemption Card
To apply for an initial or renewal tax exemption card, eligible missions and their members should submit an application on the Department’s E-Government (E-Gov) system. Applications are generally processed within five business days.
If a card is lost or stolen and the mission or member wishes to apply for a replacement card, a service fee is required. For additional details, review Diplomatic Note 15-1169: Imposition of Service Fees.
Tax exemption cards are printed by the U.S. Government Printing Office at its facility in Washington and mailed via the U.S. Postal Service to the cardholder’s residential address. Consequently, it is important that all individuals ensure that their addresses are correct with OFM.
Return of Tax Exemption Cards
All tax exemption cards are the property of the U.S. government and must be returned to OFM when they have expired or been recalled, or when the cardholder’s employment or assignment with a foreign mission has been terminated. When a mission member is terminated at one location and reaccredited at another location in the United States, his or her tax exemption card will be terminated. Therefore, he or she must return that card and apply for a new one.
If tax exemption cards are not returned to the Department, OFM reserves the right to take appropriate action, which may include temporarily suspending the issuance of new tax exemption cards to that mission.
Tax exemption cards should be delivered to OFM’s Customer Service Center at 3507 International Place NW, Washington, DC 20522, or the nearest OFM regional office (New York, Miami, Chicago, Houston, San Francisco, or Los Angeles).
Misuse of Tax Exemption Card
Noncompliance with the rules stated herein constitutes misuse of the card, which is a serious offense. In the event of misuse, OFM will take appropriate action, which may include: invalidating and recalling the card, delaying the issuance of new cards, and notifying law enforcement authorities.
Foreign missions, personnel, and vendors may contact OFM in Washington at OFMTaxCustoms@state.gov. Anyone located outside of the Washington, DC, metropolitan area may contact the nearest OFM Regional Office. Information concerning OFM’s regional offices is available at www.state.gov/ofm/ro/.
State Tax Exemption Rules and Regulations
Through the Department of State’s Diplomatic Tax Exemption Program, the U.S. Government meets its obligations under Article 34 of the Vienna Convention on Diplomatic Relations and Article 49 of the Vienna Convention on Consular Relations, as well as other similar treaties and agreements, to provide exemption from state and local sales, restaurant, lodging/occupancy and other similar taxes charged to customers.
Generally, states, territories, the District of Columbia and localities develop their own statutes, and regulations concerning the manner in which vendors may grant such tax exemptions to foreign missions and their members.
The information below is provided to better assist vendors with understanding the applicable state and local rules and regulations concerning this issue. This listing is not exhaustive of all such statutes/regulations. Therefore, if a vendor does not find information specific to their location, they are encouraged to contact the Department of State’s Office of Foreign Missions (OFM) by email at OFMTaxCustoms@state.gov or the appropriate tax authority.
Streamlined Sales Tax Exemption Certificate
The Streamlined Sales Tax Agreement, a multi-state agreement providing for the simplification of the nation’s varying sales tax laws. These states include: Indiana, Iowa, North Dakota, South Dakota, Tennessee, and Wyoming.
In accordance with the Agreement, the procedure for obtaining an exemption from sales tax on the basis of diplomatic or consular status remains similar to previous procedures. Please note that this procedure only applies to purchases made in the states listed above. The procedure for obtaining tax-exemption on purchases made in all other states and the District of Columbia has not changed. In order for foreign missions, international organizations, or their eligible members to obtain tax exemption on purchases made in the states listed above, the following procedure must be followed:
- At the point of purchase, the foreign mission, international organization, or eligible member (the purchaser) must inform the vendor that they are eligible for exemption from sales tax exemption on the basis of diplomatic or consular status.
- The purchaser must then present a valid tax-exemption identification card issued by the Department of State.
- The vendor is required to review the card to ensure that the purchase complies with the level of tax-relief the Department has reciprocally established for the cardholder.
- Sales tax exemption can only be authorized on official purchases if the payment is made with either a mission credit/debit card or a mission check. A wire transfer from the mission or the mission’s government is also an acceptable form of payment.
- If the purchase qualifies, the cardholder must complete a “Streamlined Sales Tax Agreement – Certificate of Exemption ,” and submit the document to the vendor. (See Tabs for sample certificates.)
- Once the vendor accepts the Certificate, the transaction may be authorized for sales tax exemption.
Instructions for Completing the Certificate of Exemption:
- Enter the two-letter postal abbreviation of the state where the purchase is being made. (e.g. IN, ND, SD…)
- Check the box for a single purchase certificate.
- Complete the “Business” and “Seller” section.
- Name of Purchaser – Individual, Foreign Mission, International Organization
- Business Address – Personal Address of Individual, official address of Foreign Missions or International Organization
- Purchaser’s Tax ID Number – Leave Blank
- State of Issue – Leave Blank
- Country of Issue – Leave Blank
- FEIN (Federal Employee Identification Number) – If a Foreign Mission or International Organization have this number, they may list it here, however this is not required.
- Driver’s License Number/State Issued ID Number – The purchaser may list this information, however it is not required.
- Foreign Diplomat Number – The purchaser must enter the 10-digit number displayed beneath the photo on their tax exemption identification card. (i.e. 4006-0000-01)
- Name & Address of Seller – This information can be obtained from the vendor and is required.
4. Complete the Type of Business Section
- Purchasers requesting sales tax exemption on the basis of diplomatic or consular status must circle number 20 for “Other” and write in “Diplomatic Mission” for both Personal and Mission-related expenses.
5. Complete the Reason for Exemption section.
- Purchasers requesting sales tax exemption on the basis of diplomatic or consular status must check box D, “Foreign Diplomat,” and include the number displayed beneath the photo on their tax exemption identification card. (i.e. 4006-0000-01)
6. The purchaser must sign and date the Certificate.
The Office of Foreign Missions advises all foreign missions, international organizations, and individuals that are either assigned or plan to travel to the states listed at the beginning of this notice, to make photocopies of the Streamlined Sales Tax Agreement Exemption Certificate .
If there are questions or concerns about this new procedure, please contact OFM’s Tax & Customs Program by telephone at (202) 895-3500, extension 2, or by electronic mail at email@example.com.