2 FAM 270
TAX EXEMPTIONS ACCORDED FOREIGN GOVERNMENT
REPRESENTATIVES IN THE UNITED STATES
(CT:GEN-507; 05-23-2018)
(Office of Origin: L/DL)
2 FAM 271 REAL PROPERTY OWNED BY
FOREIGN GOVERNMENTS
(CT:GEN-507; 05-23-2018)
a. Pursuant to Foreign Missions Act Designation and
Determination FMA-2014-1, dated January 8, 2014, and on the basis of
reciprocity, the Office of Foreign Missions (M/OFM/PR) authorizes real property
tax exemption for foreign missions in the United States. Generally, property
authorized for use as the premises of a diplomatic mission or consular post,
primary residence of the head of a diplomatic mission or consular post, staff
residences, and guest housing for visitors on diplomatic or consular business
are eligible for exemption when owned by the foreign government.
b. Exemption from real estate taxes includes taxes on
purchases and sales of real property, such as transfer and recordation taxes,
and annual property taxes. OFM does not authorize exemption from charges for
services such as collection of refuse or any other separately identified
charges for specific commodities or services that may appear on a tax
assessment.
c. See Diplomatic
Note 17-589: Foreign Mission Real Estate Tax
Procedures.
2 FAM 272 REAL PROPERTY OWNED BY
FOREIGN GOVERNMENT REPRESENTATIVES
(CT:GEN-486; 11-03-2017)
Pursuant to Foreign Missions Act Designation and
Determination FMA-2014-1, dated January 8, 2014, and on the basis of
reciprocity, the Office of Foreign Missions (M/OFM/PR) authorizes real property
tax exemption for the head of a diplomatic mission or consular post only, and
only for his or her primary residence or the premises of the mission or post. Other
members of foreign missions are not exempt from real property taxes or
transaction taxes.
2 FAM 273 MOTOR VEHICLE TAXES, DUTIES,
AND FEES
(CT:GEN-486; 11-03-2017)
a. M/OFM/DMV will collect reciprocal registration fees
or surcharges [taxes/duties] as well as reciprocal disposition fees and
surcharges [taxes/duties] from any foreign mission (official vehicles) and from
any member of the foreign mission community (personal vehicles) at the
appropriate time of registration or disposition of the motor vehicle as
determined by OFMs country-specific reciprocity policy.
b. If the vehicle policies of the Department and the
foreign country involved are not in reciprocal balance, M/OFM/PR will adjust
the policy as appropriate.
c. OFM/DMV is the sole provider in the United
States and its territories of motor vehicle services to foreign missions,
their members, and their members dependents, except for locally engaged staff,
U.S. citizens, or legal permanent residents (LPR). Motor vehicles include
automobiles, motorcycles, buses, trucks, and trailers that are imported,
locally purchased, leased or transferred within the foreign mission community.
2 FAM 274 INCOME TAX
2 FAM 274.1 Official Wages
(CT:GEN-428; 10-10-2014)
As a general matter, only the wages, fees, or salary of
members of the foreign mission community who are entitled to privileges under
Articles 34 or 37 of the Vienna Convention on Diplomatic Relations (VCDR),
Article 49 of the Vienna Convention on Consular Relations, or another bilateral
or multilateral agreement are exempt from federal, state, territorial, and
local income tax.
2 FAM 274.2 Non-Official Earnings
(CT:GEN-428; 10-10-2014)
Members of the foreign mission community are generally not
entitled to an exemption of federal, state, territorial, or local income tax
requirements for non-official income or earnings having its source in the
United States. Such earnings include, but are not limited to, interest or
investment income, capital gains, and gambling winnings. If a bilateral income
tax agreement exists between the United States and a foreign country, such
earnings may be exempt from taxation or eligible for reduced rates.
Individuals interested in determining if such an agreement exists should
contact the Internal Revenue Service (IRS) or a tax professional. In addition,
dependents of members of diplomatic missions or consular posts generally do not
enjoy exemption from taxation on income earned by employment in the United
States.
2 FAM 275 SOCIAL SECURITY TAX
(CT:GEN-428; 10-10-2014)
Except for U.S. citizens, all foreign diplomatic and
consular officers and employees assigned to the United States and paid by
foreign governments are excluded from the benefits of, and exempt from the
taxes levied under, the Social Security system. U.S. citizens employed in the
United States by foreign governments pay social security taxes as self-employed
persons.
2 FAM 276 SALES TAX
(CT:GEN-486; 11-03-2017)
Although many of the States and cities in the United
States impose a tax on the retail sale of commodities and services, there is no
Federal sales tax. On the basis of reciprocity, M/OFM/PR extends or limits the
ability of a foreign mission or member to receive relief of sales tax.
2 FAM 277 HOTEL and RESTAURANT TAXES
(CT:GEN-486; 11-03-2017)
Purchases at hotels and restaurants throughout the United States are generally subject to both sales and locally-imposed occupancy or meal
taxes. On the basis of reciprocity, M/OFM/PR extends or limits the ability of
a foreign mission or member to receive relief of such taxes.
2 FAM 278 FUEL AND UTILITY TAXES
2 FAM 278.1 Gasoline and Other Fuel
(CT:GEN-486; 11-03-2017)
On the basis of reciprocity, M/OFM/PR authorizes the
purchase of gasoline, diesel fuels, and other petroleum products by eligible
foreign missions and their members for relief from all federal, state,
territorial, and local taxes imposed on such transactions.
2 FAM 278.2 Utility Tax
(CT:GEN-486; 11-03-2017)
On the basis of reciprocity, M/OFM/PR authorizes the
relief of taxes on utility services used by eligible foreign missions and their
members. Utilities eligible for this privilege include, but are not limited
to, electricity, telephone, cellular phone, cable and satellite television,
internet, and heating fuel and water.
2 FAM 279 RADIO FREQUENCY TAX
(CT:GEN-324; 12-6-2005)
There is no Federal installation or licensing tax levied
on radio or television receivers in the United States. Wireless communications
transmissions by foreign missions and their members are prohibited except for
low-power communications (high frequency radio or satellite) from foreign
missions in Washington, D.C., to points outside the U.S. local communications
(e.g., motor pool) and international communications at foreign consulates
outside Washington, D.C., must be obtained via commercial means.