Internal Revenue Service
Revenue Ruling
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smRev. Rul. 65-100
1965-1 C.B. 452
IRS Headnote
To substantiate the right to exemption from the retailers excise taxes with respect to sales of taxable articles to diplomatic representatives of foreign governments, retailers must obtain a statement signed by the diplomatic representative showing: (1) the diplomat's name and official title; (2) that he is recognized by the Department of State as having diplomatic status; (3) that he is not a citizen of the United States; and (4) that the taxable article is purchased for his use and not for resale.
Revenue Ruling 296, C.B. 1953-2, 325, amplified.
Full Text
Rev. Rul. 65-100
Various retailers, particularly those located in the area of Washington, D.C., sell numerous articles to diplomatic representatives of foreign countries and to members of the families and households of those representatives. Advice has been requested concerning the evidence necessary to substantiate exemption from the retailers excise taxes with respect to sales of taxable articles to those persons having diplomatic status.
Sections 4001, 4011, 4021, and 4031 of the Internal Revenue Code of 1954 impose upon the vendor of certain articles sold at retail a tax based upon the price for which sold.
Revenue Ruling 296, C.B. 1953-2, 325, provides that exemption from the Federal retailers excise taxes extends to sales of otherwise taxable articles to ambassadors, ministers, and other duly accredited diplomatic representatives of foreign governments, together with the members of their families living with them, and members of their households, including attaches, secretaries, and clerks (but not servants), who are not citizens of the United States, nor permanent residents of the United States in an immigrant status, and who are nationals of the country of the diplomatic mission where employed.
All duly accredited diplomatic representatives are issued serially numbered identification cards which are embossed with the seal of the United States. Also, those diplomatic representatives, together with members of their families living with them and members of their households, are issued special identification cards which certify that the persons identified are entitled to purchase articles free of the Federal retailers excise taxes. Each of these cards bears a serial number and shows the name and status of the person to whom issued. The card is valid only when signed by the person to whom issued, whose photograph is attached to the back of the card.
Although cards of either type provide to retailers valuable means of identification of their customers, it is necessary that the retailers, upon whom the tax is imposed, retain sufficient records to support the exempt character of sales to those diplomatic persons specified in Revenue Ruling 296.
Accordingly, where the exempt character of a sale of an article subject to the retailers excise tax is based on the purchaser's diplomatic status, the exemption can be substantiated only if the retailer secures from the purchaser, and retains in his possession, a statement signed by the purchaser showing (1) his name and official title, (2) that he is recognized by the Department of State of the United States as having diplomatic status, (3) that he is neither a citizen of the United States nor a permanent resident of the United States in an immigrant status, and is a national of the country of the diplomatic mission where employed, and (4) that the taxable article is purchased for his use and not for resale.
Revenue Ruling 296 is hereby amplified.