How did Virginia respond when U.S. diplomatic sales-tax exemption cards moved the exemption details from the front to the reverse?

Subject

Diplomatic exemption details moved to the reverse of State Department cards

Plain-English summary

Virginia told dealers that the scope of a diplomatic sales-tax exemption now appeared on the reverse of the U.S. Department of State card. The prior regulation described exemption details on the card's face.

The Office of Foreign Missions issued cards to eligible foreign missions, mission personnel, and qualifying family members under the Foreign Missions Act. Mission cards covered official purchases by designated representatives; personal cards covered eligible individuals.

Virginia agreed to revise its regulation, publish the letter in its Policy Library, and update its frequently asked questions. Dealers still had to inspect the card to determine the particular exemption granted, but the relevant explanation was now on the back.

What this means for you

• This is historical card-design guidance from 2009.
• Diplomatic exemptions varied by cardholder and card terms.
• Dealers needed to inspect the reverse for the exemption scope.
• Current card verification should follow current federal and Virginia instructions.

Common questions

Who issued the cards?

The U.S. Department of State Office of Foreign Missions.

Where did the exemption terms appear after the redesign?

On the reverse of the card.

What did Virginia promise to update?

Its regulation, Policy Library notice, and FAQs.

Citations and references

• Foreign Missions Act of 1982, 22 U.S.C. § 4301 et seq.
• 23 VAC 10-210-694.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 09-179

Original ruling text

November 19, 2009

United States Department of State

Office of Foreign Missions

Washington, District of Columbia 20520

Dear *:

Thank you for your recent letter in which you requested that the Virginia Department of Taxation (“TAX”) revise its current regulation, 23 Virginia Administrative Code (“ VAC ”) 10-210-694, to reflect recent changes in the design of exemption cards issued by the United States Department of State pursuant to the Foreign Missions Act of 1982 (22 U.S.C. 4301 et seq. ).

Pursuant to the Foreign Missions Act of 1982, certain foreign diplomats or missions may make certain purchases and sales without incurring any sales or use tax liability. The Office of Foreign Missions issues tax exemption cards to eligible foreign missions, mission personnel and their eligible family members. Mission tax exemption cards are issued to designated representatives of embassies, consulates, and international organizations for use when making official purchases, while personal tax exemption cards are issued to individuals. By presenting these cards, qualified individuals and entities may make certain purchases exempt of the Retail Sales and Use Tax. 23 VAC 10-210-694 provides that the individual cards bear a photograph and name of the diplomat eligible for exemption, as well as an explanation as to the extent of the cardholder’s exemption. Currently, the regulation provides that the exemption information is contained on the face of the card.

The Department of State has recently informed TAX that the tax exempt information is now contained on the reverse side of tax exemption cards, rather than the front. TAX will revise 23 VAC 10-210-694 to reflect this change. TAX will also post this letter to its Policy Library website, available at www.policylibrary.tax.virginia.gov , to inform dealers of this change. TAX will also update its Frequently Asked Questions (“FAQs”) section of its website, www.tax.virginia.gov , to include information concerning the change to these cards.

If you have additional questions or concerns regarding this matter, you may contact**in my Office of Policy and Administration, Policy Development Division at ****.

Sincerely,

Janie E. Bowen

Tax Commissioner

JEB/kp

FAQs for Business

Retail Sales and Use Tax

Diplomatic Exemption

What is the diplomatic exemption ?

The United States Department of State grants a diplomatic tax exemption from the Retail Sales and Use Tax to certain foreign diplomats or missions on their purchases and sales.

How is the diplomatic exemption granted ?

Exemption cards are issued by the United States Department of State to eligible foreign missions, mission personnel and their eligible family members, through an application process.

How does a cardholder determine the extent of the exemption granted by the card ?

The extent to which an individual or mission is exempt from the tax is illustrated on the reverse of his or her exemption card.

For more information on the diplomatic tax exemption program, see www.state.gov/ofm.