Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 560.0100

560.0100 Incorporated Agencies. Sales at auction by an auctioneer on behalf of an incorporated agency of the federal government are subject to use tax. This is true even though the auctioneer is supplied with the incorporated agency's tax exempt number.

Revenue and Taxation Code section 6402 provides an exemption from payment of use tax for purchases made "from any unincorporated agency or instrumentality of the United States". There is no exemption for purchases from an incorporated agency of the United States. Thus, an auctioneer is required to collect use tax on its sales of personal property on behalf of incorporated agencies of the federal government such as the Resolution Trust Company (RTC) and the Federal Deposit Insurance Corp. (FDIC) without regard to its "tax exempt" status when the RTC and FDIC are acting in the role of a conservator.

When acting as a receiver, the RTC and FDIC are immune from all state and local taxation. State and local taxing authorities may only tax the RTC and FDIC if they consent to such taxation, by waiver of the immunity. Congress has expressly waived this immunity for state and local ad valorem real property taxes. 12/20/90; 2/1/93.