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Purchases made by foreign diplomats are generally exempt from retail sales tax if they use a valid Diplomatic Tax Exemption Card.
The U.S. Department of State issues Diplomatic Tax Exemption Cards. These cards allow cardholders to make certain purchases in the United States free from sales tax and other taxes imposed on the purchaser.
The cards have one of four distinct images of animals native to North America to indicate the level of tax exemption authorized by a particular Diplomatic Tax Exemption Card.
Types of tax exemption cards
There are two types of Diplomatic Tax Exemption Cards: Mission Tax Exemption Cards and Personal Tax Exemption Cards. Each type shows an image of an owl, buffalo, eagle, or deer, which indicates the exemption level the cardholder is authorized to receive.
Mission Exemption Cards
Diplomatic Tax Exemption Cards labeled “Mission Tax Exemption – Official Purchases Only” are used by foreign missions to get exemptions from sales tax and other imposed taxes on purchases in the United States that are necessary for the mission’s operations and functions. The cardholder must pay for all purchases with a check, credit card, or wire transfer transaction in the name of the foreign mission.
Each Mission Exemption Card displays an owl or a buffalo. Both cards are for official purchases only.
- Owl – An owl means the cardholder/mission is eligible for exemptions from sales, occupancy, restaurant/meal, and other taxes without restrictions.
- Buffalo – A buffalo means the cardholder/mission is eligible for exemptions from sales, occupancy, restaurant/meal, and other taxes with some degree of restriction.
Example: Cards with a buffalo on them may read, “EXEMPT FROM TAX ON PURCHASES OVER $300; NOT VALID AT HOTELS.” The specific restrictions will be stated on the front and back of the card.
Personal Exemption Cards
Diplomatic Tax Exemption Cards labeled as “Personal Exemption Cards” are issued to specific individuals for personal purchases. These cards are not transferable and can only be used by the individual pictured on the card. There is no restriction on the form of payment that can be used with the card.
Each Personal Exemption Card displays an eagle or a deer. Both cards are for personal purchases only.
- Eagle – An eagle means the cardholder is eligible for exemptions from sales, occupancy, restaurant/meal, and other taxes without restrictions.
- Deer – A deer means the cardholder is eligible for exemptions from sales, occupancy, restaurant/meal, and other similar taxes with some degree of restriction.
Example: Cards with a deer on them may read, “EXEMPT FROM TAX ON PURCHASES OVER $150; NOT EXEMPT FOR HOTELS, RESTAURANTS, & SERVICES.” The specific restrictions will be stated on the front and back of the card.
Limitations on the use of Diplomatic Tax Exemption Cards
Diplomatic Tax Exemption Cards can generally be used in person to obtain exemptions from sales taxes and other imposed taxes on purchases of most goods and services, hotel stays, and restaurant meals in the United States.
A Diplomatic Tax Exemption Card cannot be used to make purchases over the internet or telephone because the nature of these purchases does not allow for the presentation of the Tax Exemption Card to the vendor.
The process the Department of State uses to authorize an exemption from all other types of taxes, including but not limited to excise taxes imposed on purchases of alcohol, fuel, tobacco, and utility services, or taxes imposed on the purchase of motor vehicles, remains unchanged.
How can a seller verify the card’s validity?
The Department of State has instituted a system for online verification of a Diplomatic Tax Exemption Card at egov.ofm.state.gov/tecv. The reverse side of each diplomatic tax exemption card contains information about this service and a telephone contact number.
What is a sellers recordkeeping requirement?
Sellers must keep invoices or other written evidence of sale to support any deduction claimed on excise tax returns for sales to foreign diplomats. The invoice must show the purchaser's name, the mission's name, the tax exemption number, the expiration date of the tax exemption card, and the minimum level of exemption specified on the tax exemption card.
Do I report business and occupation (B&O) tax as a seller?
Retailing B&O tax is due for these transactions. The sales tax deduction may be shown as "other" and explained as "exempt foreign diplomat."
For more information
Contact the Department of Revenue’s Telephone Information Center at 360-705-6705.
References
WAC 458-20-190 - Sales to and by the United States and certain entities created by the United States—Doing business on federal reservations—Sales to foreign governments.
WAC 458-20-254 - Recordkeeping.
RCW 82.32.070 - Records to be preserved—Examination—Estoppel to question assessment—Unified business identifier account number records.
U.S. Department of State
