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How do I exempt transactions for zip code 20189 for diplomatic pouches or federal government purchases?

Overview

You have a transaction in Virginia with a destination address with zip code 20189 and believe it should be exempt from sales and use tax as a diplomatic pouch or federal government purchase. 

General information

U.S. Department of State provides information on diplomatic pouches. Diplomatic pouches are opaque, sealed bags or crates that transport official communications, documents, and articles of the U.S. Government across international frontiers. Authorized personnel have full use of the diplomatic pouch for personal mail. An international mail and package system is operated that ensures the delivery of personal mail and packages to American staff and their families assigned to diplomatic and consular missions throughout the world. The mail and packages consist of letters, catalogs and mail order purchases. The mail and packages are delivered to a special zip code located at a U.S postal facility in Virginia. From there, the mail and packages are delivered to the Agency's mail facility, also in Virginia. Upon receipt, the mail and packages are staged, sorted, x-rayed for security purposes, consolidated and placed in sealed pouches. Once these procedures are completed, the sealed pouches are delivered to freight forwarders for air shipment to various embassies throughout the world.

Virginia Code § 58.1-609.10(4) provides an exemption from sales and use tax for goods delivered to a factor or export agent and destined for foreign export. In 2004, the Virginia Tax Commissioner ruled in Document Number 04-11 that sale transactions involving mail order purchases between mail order companies and diplomatic and consular staff and their families overseas are not subject to the sales tax regarding the mail order purchases.

Environment

AvaTax

Resolution

  • For transactions with the destination zip code 20189 in Dulles, Virginia, AvaTax returns tax at the state and local rates in order to maintain compliance with Virginia reporting procedures.
  • To exempt sales to the Diplomatic Post Office in Dulles, you need to select Entity Use Code D – Foreign Diplomats.
  • For purchases made by the State Department for use at the Diplomatic Post Office, you need to select Entity Use Code A – Federal Government
  • Invoices using Entity Use Codes A or D will be reported as exempt sales on Virginia returns.