bupersinst 1710.16 - Fitness, Sports and Deployed Forces Support

7. Taxes
BUPERSINST 1710.16
a. Legal Status. Recreation funds are instrumentalities of
the Federal Government and should participate in whatever
immunities such status may derive under the Constitution and
Federal Statutes.
b. Tax Exemption Certificate. The unit shall obtain this
certificate from the Regional Internal Revenue Service Office by
filing Form SS4. The IRS will issue the command an employer’s
identification number to validate the recreation fund’s tax
exempt status.
c. Federal Taxes Not Applicable
(1) Monies derived from recreation functions are excluded
from the provisions of the Internal Revenue Code.
(2) To acquire a tax-free number or employer ID number,
contact your local fleet recreation coordinator for assistance.
(3) Recreation activities are exempt from payment of
the Federal Communication tax on the following types of
communications:
messages.
(a) Long distance telephone or radio telephone
(b) Domestic telegraph, cable or radio dispatch
messages. No certificate of exemption is necessary for the
purpose of establishing exemption from the tax on amounts paid
directly for telegraph, telephone, radio and cable services or
facilities. A recreation fund may note on any bill submitted
that it is an instrumentality of the United States Government.
This exemption applies only to official calls and services and
does not apply to personal calls placed from the activity.
(c) Communications with Federal Authorities. The
initiation of inquiries or replies to Federal authorities
regarding taxation and regulations affecting recreation functions
and/or recreation funds shall be cleared via the chain of command
with BUPERS (Pers-65) before any action is taken.
(d) State and Local Tax. Instrumentalities of the
United States Government are not subject to direct taxation by
state or local taxing authorities, except when authorized by
Federal statute. The initiation of inquiries or replies to state
Enclosure (2)