Internal Revenue Service
Rev. Rul. 68-352
1968-2 C.B. 487
Caution: Obsoleted by Rev. Rul.98-24
Sales of taxable article to consular officers of the Government of France are not exempt from the Federal retailers or manufacturers excise taxes imposed under chapters 31 and 32 of the Code.
Rev. Rul. 68-352
The Consular Convention between the United States and France, signed at Paris on July 18, 1966, entered into force January 7, 1968. Article 24 thereof provides, in part, that consular officers, consular employees, and members of their families forming part of their households shall be exempt from all dues and taxes, personal or real, national, regional or municipal, with certain exceptions. One of these exceptions is `indirect taxes of a kind which are normally incorporated in the price of goods or services.' For purposes of this exception, whether a tax on sales of goods or services is considered to be a direct or an indirect tax is entirely dependent upon the statute imposing such tax.
Held , because the Federal retailers excise taxes imposed under chapter 31 of the Internal Revenue Code of 1954 and the manufacturers excise taxes imposed under chapter 32 are imposed on the manufacturer or retailer of the goods sold and not directly on the purchaser, they are, within the meaning of the Consular Convention, considered to be indirect taxes of a kind normally incorporated in the price of the goods sold and excluded from the exemption by the exception contained in Article 24 thereof. Accordingly, sales of taxable articles to consular officers of the government of France are not exempt from the Federal retailers or manufacturers excise taxes, even though such taxes are passed on to the purchaser of the goods and may be stated separately on the sales in voices.
See Revenue Ruling 296, C.B. 1953-2, 325, which relates to exemption from Federal excise taxes with respect to foreign diplomatic, consular, and other officers and agencies of foreign governments.