2 FAM 270
TAX EXEMPTIONS ACCORDED FOREIGN GOVERNMENT REPRESENTATIVES IN THE UNITED STATES
(CT:GEN-590; 03-30-2023)
(Office of Origin: L/DL)
2 FAM 271 REAL PROPERTY OWNED BY FOREIGN GOVERNMENTS
(CT:GEN-590; 03-30-2023)
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 (OFM) 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-590; 03-30-2023)
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 (OFM) 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-590; 03-30-2023)
a. OFM 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 OFM’s country-specific reciprocity policy.
b. If the vehicle policies of the Department and the foreign country involved are not in reciprocal balance, OFM will adjust the policy as appropriate.
c. OFM 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-590; 03-30-2023)
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, OFM 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-590; 03-30-2023)
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, OFM 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-590; 03-30-2023)
On the basis of reciprocity, OFM 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-590; 03-30-2023)
On the basis of reciprocity, OFM 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.