FAR 52.229-3 - Federal, State, and Local Taxes

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Prescribed in 29.401-3
Effective Date:	1 February 2013
Clause or Provision:	Clause
Provision or Clause Number:	52.229-3 - Federal, State, and Local Taxes
Principle Type And/Or Purpose of Contract:
Required:
Applicable:	Time and Materials/Labor Hour; Facilities; Architect-Engineering; Dismantling, Demolition or Removal of Improvements; Fixed Price, Supply; Communication Services; Leasing of Motor Vehicles; Time & Material/Labor Hour; Fixed Price, Construction; Fixed Price, Service; Fixed Price, R&D; Indefinite Delivery; Transportation
Optional:	Utility Services; Simplified Acquisition Procedures (Excludes Micro-Purchase); Cost Reimbursement, Construction; Cost Reimbursement, Supply; Cost Reimbursement, Service
Subject:	Taxes"Taxes" is not in the list (Commercial Item, Independent Price Determination, Hotline Posters, Whistleblower Protection, Contingent Fees, Specifications/Standards, Leased Vehicles and Equipment, Payments to Influence Certain Federal Transactions, Contracts, Representations and Certifications, Executive Compensation, ...) of allowed values for the "CCSubject" property.
ProcurementType:
Contract Threshold:	>150,000">150,000" is not in the list (>10M, >5M, >1M, >750,000, >700,000, >500,000, >150,000, >100,000, >30,000, >25,000, ...) of allowed values for the "ContractThreshold" property.
Prescription Overview:	Prescription (a) Except as provided in paragraph (b) of this section, insert the clause at 52.229-3, Federal, State, and Local Taxes, in solicitations and contracts if— (1) The contract is to be performed wholly or partly in the United States or its outlying areas; (2) A fixed-price contract is contemplated; and (3) The contract is expected to exceed the simplified acquisition threshold.
Clause Overview:	Clause Definitions (a) As used in this clause— “After-imposed Federal tax” means any new or increased Federal excise tax or duty, or tax that was exempted or excluded on the contract date but whose exemption was later revoked or reduced during the contract period, on the transactions or property covered by this contract that the Contractor is required to pay or bear as the result of legislative, judicial, or administrative action taking effect after the contract date. It does not include social security tax or other employment taxes. “After-relieved Federal tax” means any amount of Federal excise tax or duty, except social security or other employment taxes, that would otherwise have been payable on the transactions or property covered by this contract, but which the Contractor is not required to pay or bear, or for which the Contractor obtains a refund or drawback, as the result of legislative, judicial, or administrative action taking effect after the contract date. “All applicable Federal, State, and local taxes and duties” means all taxes and duties, in effect on the contract date, that the taxing authority is imposing and collecting on the transactions or property covered by this contract. “Contract date” means the date set for bid opening or, if this is a negotiated contract or a modification, the effective date of this contract or modification. “Local taxes” includes taxes imposed by a possession or territory of the United States, Puerto Rico, or the Northern Mariana Islands, if the contract is performed wholly or partly in any of those areas. Price Includes Taxes (b) (1) The contract price includes all applicable Federal, State, and local taxes and duties, except as provided in subparagraph (b)(2)(i) of this clause. (2) Taxes imposed under 26 U.S.C. 5000C may not be— (i) Included in the contract price; nor (ii) Reimbursed. Price Increase Due to Taxes (c) The contract price shall be increased by the amount of any after-imposed Federal tax, provided the Contractor warrants in writing that no amount for such newly imposed Federal excise tax or duty or rate increase was included in the contract price, as a contingency reserve or otherwise. Price Decrease Due to Taxes (d) The contract price shall be decreased by the amount of any after-relieved Federal tax. (e) The contract price shall be decreased by the amount of any Federal excise tax or duty, except social security or other employment taxes, that the Contractor is required to pay or bear, or does not obtain a refund of, through the Contractor’s fault, negligence, or failure to follow instructions of the Contracting Officer. Adjustment Threshold (f) No adjustment shall be made in the contract price under this clause unless the amount of the adjustment exceeds $250. Contractor Notification Requirements (g) The Contractor shall promptly notify the Contracting Officer of all matters relating to any Federal excise tax or duty that reasonably may be expected to result in either an increase or decrease in the contract price and shall take appropriate action as the Contracting Officer directs. Exemptions (h) The Government shall, without liability, furnish evidence appropriate to establish exemption from any Federal, State, or local tax when the Contractor requests such evidence and a reasonable basis exists to sustain the exemption.
Important Notes/Requirements:
Subcontract Threshold:	>150,000">150,000" is not in the list (>10M, >5M, >1M, >750,000, >700,000, >500,000, >150,000, >100,000, >30,000, >25,000, ...) of allowed values for the "SubcontractThreshold" property.
Incorporated by Reference:	Yes
Uniform Contract Format:	I
Editor:	Marshall

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Personal notes.