FAR and DFARS › FAR Part 29: Taxes › Subpart 29.2
FAR 29.201 General.
The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.
In plain English
This section explains that federal excise taxes apply to certain supplies and services, and that the Government may be exempt from some of these taxes. Contracting officers must solicit prices without tax when the Government is exempt, and with tax when no exemption exists. Agencies must maximize use of available exemptions.
Applies to: Contracting officers and executive agencies
What it requires
- Solicit prices on a tax-exclusive basis when the Government is exempt from excise taxes.
- Solicit prices on a tax-inclusive basis when no exemption exists.
- Take maximum advantage of available Federal excise tax exemptions.
Key terms: Federal excise taxes · tax-exclusive basis · tax-inclusive basis · exemption
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) Federal excise taxes are levied on the sale or use of particular supplies or services. Subtitle D of the Internal Revenue Code of 1954, Miscellaneous Excise Taxes, 26 U.S.C. 4041 et seq., and its implementing regulations, 26 CFR parts 40 through 299, cover miscellaneous federal excise tax requirements. Questions arising in this area should be directed to the agency-designated counsel. The most common excise taxes are—
(1) Manufacturers' excise taxes imposed on certain motor-vehicle articles, tires and inner tubes, gasoline, lubricating oils, coal, fishing equipment, firearms, shells, and cartridges sold by manufacturers, producers, or importers; and
(2) Special-fuels excise taxes imposed at the retail level on diesel fuel and special motor fuels.
(b) Sometimes the law exempts the Federal Government from these taxes. Contracting officers should solicit prices on a tax-exclusive basis when it is known that the Government is exempt from these taxes, and on a tax-inclusive basis when no exemption exists.
(c) Executive agencies shall take maximum advantage of available Federal excise tax exemptions.
Sections that refer to it
- 29.204 Federal excise tax on specific foreign contract payments.
← 29.101 Resolving tax problems. · 29.202 General exemptions. →
Rule changes for FAR Part 29
- Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 5, 24, and 29 ↗ · proposed 2026-06-23 · comments due 2026-07-23
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.