FAR and DFARS › FAR Part 29: Taxes › Subpart 29.2
FAR 29.202 General exemptions.
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 lists situations where federal manufacturers' or special-fuels excise taxes do not apply to supplies sold to the government. It matters because contractors may not have to pay these taxes in certain cases, such as for state use, export, further manufacture, vessels of war, nonprofit educational organizations, or emergency vehicles.
Applies to: Contractors involved in selling supplies to the government in the listed situations.
What it requires
- For export exemption, ensure shipment occurs within 6 months of title passing to the Government and include 'for export' on the contract or purchase document.
- For vessels of war exemption, make the purchase on a tax-exclusive basis and obtain an exemption certificate from the contracting officer.
Key terms: manufacturers' excise taxes · special-fuels excise taxes · exclusive use · for export · further manufacture
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
No Federal manufacturers' or special-fuels excise taxes are imposed in many contracting situations as, for example, when the supplies are for any of the following:
(a) The exclusive use of any State or political subdivision, including the District of Columbia (26 U.S.C. 4041 and 4221).
(b) Shipment for export to a foreign country or an outlying area of the United States. Shipment must occur within 6 months of the time title passes to the Government. When the exemption is claimed, the words “for export” must appear on the contract or purchase document, and the contracting officer must furnish the seller proof of export (see 26 CFR 48.4221-3).
(c) Further manufacture, or resale for further manufacture (this exemption does not include tires and inner tubes) (26 CFR 48.4221-2).
(d) Use as fuel supplies, ships or sea stores, or legitimate equipment on vessels of war, including (1) aircraft owned by the United States and constituting a part of the armed forces and (2) guided missiles and pilotless aircraft owned or chartered by the United States. When this exemption is to be claimed, the purchase should be made on a tax-exclusive basis. The contracting officer shall furnish the seller an exemption certificate for Supplies for Vessels of War (an example is given in 26 CFR 48.4221-4(d)(2); the IRS will accept one certificate covering all orders under a single contract for a specified period of up to 12 calendar quarters) (26 U.S.C. 4041 and 4221).
(e) A nonprofit educational organization (26 U.S.C. 4041 and 4221).
(f) Emergency vehicles (26 U.S.C. 4053 and 4064(b)(1)(c)).
← 29.201 General. · 29.203 Other Federal tax 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.