29.000
Scope of part
FAR 29.000 sets the framework for handling taxes in federal contracts, covering tax clauses, exemptions, and refunds.
Overview
FAR 29.000 outlines the scope of Part 29, which establishes the policies and procedures related to taxes in government contracting. This section covers the use of tax clauses in contracts (including those performed overseas), the process for asserting immunity or exemption from taxes, and the procedures for obtaining tax refunds. It also provides guidance on how Federal, State, and local taxes apply to supplies and services acquired by executive agencies, clarifying the Federal Government's tax obligations and exemptions. While this section is primarily informational for government personnel, it sets the stage for understanding how taxes intersect with federal procurement without delving into the full details of tax law.
Key Rules
- Use of Tax Clauses
- Establishes when and how tax clauses should be included in contracts, including foreign contracts.
- Tax Immunity or Exemption
- Provides procedures for asserting the Federal Government's immunity or exemption from certain taxes.
- Tax Refunds
- Outlines the process for seeking refunds on taxes paid in connection with government contracts.
Responsibilities
- Contracting Officers: Must be aware of tax-related clauses and procedures for exemptions and refunds.
- Contractors: Should understand how tax clauses may affect contract pricing and compliance.
- Agencies: Need to ensure proper application of tax policies and maintain awareness of relevant tax obligations.
Practical Implications
- This section exists to clarify the intersection of tax law and federal procurement, helping agencies and contractors navigate tax-related issues in contracts.
- It impacts daily contracting by requiring attention to tax clauses, exemptions, and refund opportunities.
- Common pitfalls include misunderstanding tax applicability or failing to assert exemptions properly.