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FAR and DFARS › FAR Part 29: Taxes › Subpart 29.4

FAR 29.401-3 Federal, State, and local taxes.

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 tells contracting officers when to include a tax clause in certain fixed-price contracts. It matters to contractors because it determines whether the contract will contain the standard Federal, State, and Local Taxes clause or, in a noncompetitive award, a version allowing State and local tax adjustments.

Applies to: Solicitations and contracts that are fixed-price, performed wholly or partly in the United States or its outlying areas, and expected to exceed the simplified acquisition threshold

Key terms: Federal, State, and Local Taxes · fixed-price contract · simplified acquisition threshold · noncompetitive contract · State and Local Adjustments

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(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.

(b) In a noncompetitive contract that meets all the conditions in paragraph (a) of this section, the contracting officer may insert the clause at 52.229-4, Federal, State, and Local Taxes (State and Local Adjustments), instead of the clause at 52.229-3, if the price would otherwise include an inappropriate contingency for potential postaward change(s) in State or local taxes.

Sections it refers to

  • 52.229-3 Federal, State, and Local Taxes.
  • 52.229-4 Federal, State, and Local Taxes (State and Local Adjustments).

Sections that refer to it

  • 52.229-3 Federal, State, and Local Taxes.
  • 52.229-4 Federal, State, and Local Taxes (State and Local Adjustments).

← 29.401-2 Construction contracts performed in North Carolina. · 29.401-4 New Mexico gross receipts and compensating tax. →

Rule changes for FAR Part 29

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 29.401-3 Federal, State, and local taxes · SpendQuery