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Revenue Ruling 63-150

Rev. Rul. 63-150 1963-2 C.B. 477

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Headnote

The sale or lease by manufacturers of taxable articles for the use of a foreign embassy located in the United States is exempt from the manufacturers excise taxes, imposed under chapter 32 of the Internal Revenue Code of 1954, provided the sale or lease is made directly to a person having diplomatic status. Revenue Ruling 296, C.B. 1953-2, 325, amplified.

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ISSUE

Advice has been requested whether the sale or lease by manufacturers of taxable articles for the use of a foreign embassy located in the United States is exempt from the manufacturers excise taxes imposed under chapter 32 of the Internal Revenue Code of 1954.

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LAW AND ANALYSIS

Revenue Ruling 296, C.B. 1953-2, 325, provides, in part, that ambassadors, ministers, and other duly accredited diplomatic representatives of foreign governments, together with the members of their families living with them, and members of their households, including attaches, secretaries and clerks (but not servants), who are not citizens of the United States, nor permanent residents of the United States in an immigrant status, and who are nationals of the country of the diplomatic mission where employed, (1) are not required to pay Federal excise taxes, the legal incidence of which would otherwise fall upon them, and (2) if any such person purchases from the manufacturer thereof an article otherwise subject to a Federal excise tax on sales by manufacturers, the transaction will not be taxed.

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HOLDING

It is held that the sale or lease of a taxable article by the manufacturer thereof for the use of a foreign embassy located in the United States comes within the scope of the exemption from the manufacturers excise taxes extended by Revenue Ruling 296, provided the sale or lease is made directly to a person having diplomatic status. To support the tax-exempt character of such a sale or lease, the manufacturer must obtain a statement from the purchaser or lessee showing (1) his name and official title, (2) that he is recognized by the Department of State as having diplomatic status, (3) that he is neither a citizen of the United States nor a permanent resident of the United States in an immigrant status, and is a national of the country of the diplomatic mission where employed, and (4) that the taxable article is purchased or leased for the use of the embassy and not for resale. Where a sale or lease of taxable articles by the manufacturer thereof for the use of a foreign embassy located in the United States is made to an agency or commission of a foreign government or to a person other than an accredited diplomatic representative, the sale or lease is not exempt from the manufacturers excise taxes.

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EFFECT ON OTHER DOCUMENTS

Revenue Ruling 296 is hereby amplified.