Tax Information

The GSA SmartPay® program provides charge card services to federal government agencies/organizations for conducting official business. The program consists of three business lines, purchase, travel and fleet.

Purchase cards are for purchasing supplies and services for U.S. government agencies; travel cards for official government travel and related expenses; and fleet cards for government vehicle fuel and maintenance requirements. There are also integrated cards, which combine two or more of the business lines on the same card.

GSA sent a letter to the states requesting tax exemption for purchases made with the cards. To understand how taxes are treated, you need to determine what type of account was involved in the transaction, and then how the particular State treats those accounts for tax purposes.

There are three account types within GSA SmartPay® Program:

Centrally Billed Accounts (CBAs): CBAs are card accounts where payment is made directly to the bank by the government.

Individually Billed Accounts (IBAs): IBAs are card accounts where payment is made directly to the bank by the individual.

Integrated Accounts: CBA.

Currently, the Department of Interior is the only agency that uses the Integrated Card and is handled as follows: purchase, fleet transactions, and travel transactions (airline and rail tickets, lodging, shuttles, rental cars, taxis, etc) are centrally billed accounts with the exception of meals, incidentals, and ATM expenses.

Transactions against federal government accounts that are directly paid by the government (i.e. purchase card, centrally billed travel card, fleet card, and integrated card accounts) are exempt from state and local taxes for purchases made within the United States. These are considered centrally billed accounts.

Fleet Cards and Integrated:

Purchase and Integrated Cards:

Travel and Integrated Cards:

Some states also provide tax exemption on individually billed travel accounts.

To determine whether the travel or integrated card is a CBA or an IBA, refer to the 6^th digit of the account number on the card. Here is a table that can help:

After identifying the type of account, read the applicable State tax letter to determine how that State will treat the card for tax purposes.

The State tax letters also identify any tax exemption certification that may be required.