IRS Revenue Ruling
1998-24

Code Secs. 4041, 4071, 4081, 4091, 4161

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26 CFR 48.4041-3: Application of tax on sales of special motor fuel for
use in motor vehicles and motorboats.
(Also section 4071, 4081, 4091, 4161; 48.4071-1, 48.4081-2, 48.4161(a)-1,
48.4161(b)-1.)

Exemption from certain federal excise taxes for consular officers and
employees. If consular officers and employees and members of their
families forming part of their households purchase from the manufacturer
thereof an article subject to a federal excise tax on sales by
manufacturers, or purchase from a retailer an article otherwise subject to
a federal excise tax on sales by retailers, the transaction will not be
taxed. Rev. Rul. 73-198 modified and Rev. Rul. 68-352 obsoleted.


REV. RUL. 98-24

This revenue ruling modifies Rev. Rul. 73-198, 1973-1 C.B. 425, which
discusses exemptions from certain federal excise taxes extended to foreign
diplomatic, consular, and other officers, and agencies or commissions of
foreign governments.

Rev. Rul. 73-198 provides that if ambassadors, ministers, other duly
accredited diplomatic representatives of foreign governments, the members
of their families living with them, members of their households (but not
servants), attaches, secretaries, clerks, and also officers of missions to
the United Nations and the Organization of American States serving in a
representative capacity and family members living with such officers,
purchase from the manufacturer thereof an article otherwise subject to a
federal excise tax on sales by manufacturers, or purchase from a retailer
an article otherwise subject to a federal excise tax on sales by
retailers, the transaction will not be taxed. Rev. Rul. 73-198 does not
extend this benefit to consular officers and employees of foreign
governments and members of their families forming part of their
households.

Under section 201(c) of the Foreign Missions Act, 22 U.S.C. section
4301 (1994), the Secretary of State is authorized to determine the
treatment that should be accorded a foreign mission in the United States
based on due consideration of the benefits, privileges, and immunities
provided to missions of the United States in the country or territory
represented by the foreign mission. The Secretary of State, after due
consideration of the benefits, privileges, and immunities provided to
missions of the United States under the Vienna Convention on Consular
Relations and other governing treaties, has determined that if consular
officers and employees (not including honorary consuls) and members of
their families forming part of their households purchase from the
manufacturer thereof an article otherwise subject to a federal excise tax
on sales by manufacturers, or purchase from a retailer an article
otherwise subject to a federal excise tax on sales by retailers, the
transaction will not be taxed.

This benefit does not extend to U.S. nationals or permanent residents
of the United States or to consular officers and employees (and their
family members) of a consular mission representing a country or territory
that does not provide benefits, privileges, and immunities to missions of
the United States on a reciprocal basis as determined by the Secretary of
State. "Consular officer" is defined as any person, including the head of
a consular post, entrusted in that capacity with the exercise of consular
functions, and "consular employee" is defined as any person employed in
the administrative or technical service of the consular post.

As a result of this revenue ruling, Rev. Rul. 68-352, 1968-2 C.B. 487,
is no longer determinative of the exemption from federal retailers and
manufacturers excise taxes with respect to consular officers and employees
(not including honorary consuls) of the Government of France and members
of their families forming part of their households. Accordingly, Rev. Rul.
68-352 is declared obsolete.


EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 73-198 is modified. Rev. Rul. 68-352 is obsoleted.


DRAFTING INFORMATION

The principal author of this revenue ruling is Susan Athy of the Office
of Assistant Chief Counsel (Passthroughs and Special Industries). For
further information regarding this revenue ruling contact Susan Athy on
(202) 622-3130 (not a toll-free call).

<<END RULING>>
 

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