Sales to the United States Government (Publication 102)

Exempt Sales and Leases

Your sales and leases of merchandise to the United States (U.S.) government are generally exempt from California sales and use tax. This includes sales and leases to:

• The United States or its unincorporated agencies and instrumentalities. Examples include the U.S. Postal Service, branches of the armed services, military exchanges, federal courts, and agencies such as the U.S. Forest Service and the U.S. Department of Housing and Urban Development.
• Any incorporated agency or instrumentality of the United States that is wholly owned either by the United States or by a corporation that is wholly owned by the United States. Examples include the Resolution Trust Corporation and the Federal National Mortgage Association (Fannie Mae).
• Incorporated federal instrumentalities that are not wholly owned by the United States, unless federal law permits taxing them. Examples include federal reserve banks, federal credit unions, federal land banks, and federal home loan banks.
• The American National Red Cross, including its chapters and branches.

If you are unsure whether an agency, corporation, or other organization fits into one of the categories listed here, please contact our Customer Service Center for assistance at 1‑800‑400‑7115 (TTY:711).

Please note: Sales to individual members of the armed services do not qualify for this exemption, even if the merchandise is billed through an exempt organization such as a service exchange or officers’ mess. In addition, sales to State of California agencies and state political subdivisions—counties, cities, and special districts (such as irrigation, fire, and school districts)—are generally taxable. This holds true even if the purchase is made using federal funds.

Please note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, decisions will be based on the law and not on this publication.