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BTLG Table of Contents > Sales and Use Tax Annotations > S > 505.0000 Sales to the United States and Its Instrumentalities > Annotation 505.0608

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505.0000 Sales to the United States and Its Instrumentalities—Regulation 1614

Annotation 505.0608

(b) Agencies Not Qualifying for Exemption

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505.0608 Sales to the U.S. Government. Sales to a U.S. government contractor, that would otherwise be taxable, do not qualify for exemption on the strength of an amendment made to the contract with the U.S. providing that the contractor acted as an agent of the U.S. for certain purposes, including the disbursement of government funds for the acquisition of property. In ruling on this situation, the U.S. Supreme Court concluded that if the contractors can realistically be considered entities independent of the United States, a tax on them cannot be viewed as a tax on the United States. Also, there is some doubt whether a person not an instrumentality of the United States can act as an agent of the United States (see United States v. New Mexico (1982) 455 U.S. 720, 71 L.Ed.2d 580). 4/1/94.