Administrative Procedure  AP 102: Diplomatic/Consular Exemptions

Date:	01/23/2024
Organization:	Massachusetts Department of Revenue
Referenced Sources:	Massachusetts General Laws

102.1. Introduction

By the terms of certain treaties and conventions, some foreign diplomatic and consular personnel are exempt from certain state taxes.  Diplomatic exemptions are jointly administered by the U.S. Department of State and the Massachusetts Department of Revenue.  The chart below outlines the taxes affected by the exemption and the procedures to be followed to obtain the exemption.

In addition, pursuant to an agreement under the Taiwan Relations Act (1979), the Taiwan Relations Act (2013), the Taipei Economic and Cultural Representative Office (TECRO) and Taipei Economic and the Cultural Offices (TECOs), their eligible employees and dependents are also eligible for certain tax exemptions.  These tax exemption privileges are authorized by the American Institute in Taiwan (AIT) and not the U.S. Department of State.  The AIT issued tax exemption cards incorporate the same features and design elements as the State Department’s tax exemption cards.  The cards have “American Institute in Taiwan” printed on the front.

102.2. Instructions for Diplomats

Instructions for applying for an exemption card and an explanation for the use of the card and the procedures to be followed to obtain the exemption for various taxes are listed below.

102.2.1. Applying for Diplomatic Exemption Card

The U.S. Department of State administers the initial steps in obtaining a diplomatic exemption.  To see if you are eligible to receive an exemption card, write, email or call:  Office of Foreign Missions, U.S. Department of State, 3507 International Place NW, Washington, D.C. 20522, [e-mail], 202-895-3500 x2 or contact the New York OFM regional office at [e-mail] or 646-282-2825.  

The American Institute in Taiwan administers the process for obtaining an AIT Tax Exemption cards.  To determine if you are eligible to receive an exemption card, write to:  American Institute in Taiwan, 2700 N. Moore Street, Suite 1700, Arlington, VA 22209.

102.2.2. Exemption and Procedures Chart for Diplomatic and AIT Cards

The following chart outlines the taxes affected by the exemption and the procedures to be followed to obtain the exemption.

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TAX TYPE	EXEMPTION	PROCEDURES
Income	Limited to income connected to work as a diplomat and excludable for federal tax purposes.	If diplomatic income is incorrectly reported, file Form ABT.  See AP 627 for abatement procedures.
Sales/Use Tax	Allowed	Exemption available at time of transaction with valid diplomatic identification exemption card.  See DD 03-4.
Sales Tax on Meals	Allowed	Exemption available at time of transaction with valid diplomatic identification exemption card.  See DD 03-4.
Room Occupancy Excise	Allowed	Exemption available at time of transaction with valid diplomatic identification exemption card.  See DD 03-4.
Cigarette Excise	Limited	Exemption available only if cigarettes are purchased at a bonded customs facility.
Alcoholic Beverage Excise	Limited	Exemption available only if liquors are purchased at a bonded customs facility.
Gasoline Excise	Allowed	If diplomat presents special oil company credit card, the subsequent bill will not include tax.  Effective 6/1/87. See TIR 87-5.
Special Fuels	Allowed	If diplomat presents special oil company credit card, the subsequent bill will not  Include tax.  Effective 6/1/87.  See TIR 87-5.
Estate Tax	Not allowed for real estate.
Inheritance Tax	Not allowed for real estate.
Deeds Excise	Allowed for mission property, including a government-owned residence of a career head of post: otherwise not allowed.	No exemption will be granted unless the mission, TECRO or TECO receives a letter of exemption from the Office of Foreign Missions.

102.3. Information for Vendors: Sales, Meals and Rooms Taxes

Diplomats may obtain an exemption from these taxes by presenting a valid tax exemption card issued by the U.S. Department of State or the American Institute in Taiwan.  As of December 2014, the Department of State issues four types of exemption cards:

• The Owl card exempts all official purchases from sales, meals, room occupancy and other similarly imposed taxes (see above), but it may not be used for any personal purchases.

• The Buffalo card exempts some official purchases, subject to the restrictions listed on the face of the card, but it may not be used for any personal purchases. 

• The Eagle card exempts all personal purchases from sales, meals,  room occupancy and other similarly imposed taxes (see above), but it may not be used for any official purchases. 
• The Deer card exempts some personal purchases, subject to the restrictions listed on the face of the card, but it may not be used for any official purchases.

102.3.1. Special Rule for the Purchase of Motor Vehicles

The Office of Foreign Missions (OFM) pre-determines the eligibility of foreign missions and their members and of the Taipei Economic and Cultural Representative Office (TECRO) and the Taipei Economic and Cultural Offices (TECOs) and their eligible employees for exemption from the payment of any tax on the purchase, lease, registering or titling of a vehicle.  The procedures to determine the eligibility of the mission or a member may be found on OFM’s website: http://www.state.gov/ofm/tax/vehicle/index.htm.  No exemption will be granted unless the mission or its employee receives a letter of exemption from OFM.

102.3.2. Procedures

The Tax Exemption Card system for diplomats replaces DOR's former "Diplomatic and Consular Exemptions" Letter.  See DOR Directive 88-3.  Beginning June 1, 1988, Massachusetts vendors may no longer accept the Letter as proof that a purchaser is exempt from the sales or rooms tax.  The purchaser must present the official Department of State Tax Exemption Card or the AIT Exemption Card to receive an exemption.  If a vendor is presented with a request for an exemption, the vendor must:

(1) Check the card's expiration date.

(2) Determine the type and level of exemption allowed by looking at the Animal on the card and any other information listed on the front of the card.

(3) Verify that the person requesting the exemption is the person identified on the card.  If necessary, the vendor should request another form of identification.

(4) Photocopy both sides of the Tax Exemption Card.  If no photocopy machine is available, write the following information on the back of the bill of sale:

• Mission Represented
• Name of Card Bearer
• Expiration Date of Card
• Tax Exemption Number and Animal

(5) If the card presented is a "Mission" Card, the diplomat must sign the photocopy to verify that the purchases being made are for official use.  If no photocopy is made, have the diplomat sign the bill of sale.  The diplomat pictured on the “Mission” card need not be present, but the person requesting the exemption must provide valid identification.  Please keep all documentation concerning the exemptions with your other tax records.

The vendor is responsible for maintaining all appropriate tax records.  If an exemption is questioned, the vendor has the burden or proving that the exemption was properly given.

The validity of a Diplomatic Tax Exemption Card can be verified on-line at https://ofmapps.state.gov/tecv/ or by contacting the Office of Foreign Missions, U.S. Department of State, 3507 International Place NW, Washington, D.C. 20522, or calling the Office of Foreign Missions at (202)-895-3500, x2; or email your questions to [e-mail], or by contacting OFM’s New York regional office at (646)-282-2825 or by email: [e-mail].

The validity of an American Institute in Taiwan (AIT) tax exemption card can be verified at https://ofmapps.state.gov/tecv or by contacting AIT at (703)-525-8575 or OFM at (202)-895-3500. 

You may also contact the Department of Revenue’s Taxpayer Service Division, 200 Arlington Street, Chelsea, MA 02150, 1-(617)-887-MDOR (6367).   

REFERENCES:
TIR 76-4
TIR 87-5
TIR 99-4
TIR 99-21
DD 88-3
DD 03-4
AP 627, Applications for Abatement
Form ABT, Application for Abatement – Amended Return