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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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U


565.0000 United States Contractors

Annotation 565.1200

(e) Title-Passage Clauses


565.1200 Cost Reimbursement Contracts. Sales to contractors of equipment and materials under a "cost reimbursement" contract with the U.S. Department of Health, Education and Welfare are exempt sales for resale to the United States provided:

1. There is an appropriate title clause passing title to the property to the government prior to any use by the contractor;

2. The contractor is reimbursed by the United States for his actual costs;

3. Control over the property is placed in government from time title vests in United States; and

4. The property is not used to construct improvements on or to real property. 5/8/67.