[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR29.101]

[Page 550]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 29_TAXES--Table of Contents
 
                          Subpart 29.1_General
 
Sec.  29.101  Resolving tax problems.


    (a) Contract tax problems are essentially legal in nature and vary 
widely. Specific tax questions must be resolved by reference to the 
applicable contract terms and to the pertinent tax laws and regulations. 
Therefore, when tax questions arise, contracting officers should request 
assistance from the agency-designated legal counsel.
    (b) To keep treatment within an agency consistent, contracting 
officers or other authorized personnel shall consult the agency-
designated counsel before negotiating with any taxing authority for the 
purpose of (1) determining whether or not a tax is valid or applicable 
or (2) obtaining exemption from, or refund of, a tax.
    (c) When the constitutional immunity of the Government from State or 
local taxation may reasonably be at issue, contractors should be 
discouraged from negotiating independently with taxing authorities if 
the contract involved is either (1) a cost-reimbursement contract or (2) 
a fixed-price contract containing a tax escalation clause.
    (d) Before purchasing goods or services from a foreign source, the 
contracting officer should consult the agency-designated counsel (1) for 
information on foreign tax treaties and agreements in force and on the 
implementation of any foreign-tax-relief programs and (2) to resolve any 
other tax questions affecting the prospective contract.