AR 215-1 - Soldier Support Institute - U.S. Army
AR 215-1 - Soldier Support Institute - U.S. Army
AR 215-1 - Soldier Support Institute - U.S. Army
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employment taxes will be withheld when the NAFI/entity has the legal right to control the method and result of the<br />
services performed.<br />
(1) Generally, individuals who offer their services to the public are independent contractors and not employees (such<br />
as physicians, lawyers, dentists, construction contractors, public stenographers, and auctioneers, engaged in the pursuit<br />
of an independent trade, business, or profession). Sporting officials and instructors under contract with a NAFI/entity<br />
may be employees of the NAFI/entity for Federal income and employment tax purposes (FICA and all other taxes paid<br />
by the NAFI/entity are added to the contract cost). Under these circumstances, individuals will be notified that, for<br />
Federal income and employment tax purposes, they will be treated as NAF employees regardless of the provisions of<br />
<strong>AR</strong> <strong>215</strong>–4.<br />
(2) DOD 7000.14–R, volume 13, chapter 8, lists common law rules that are used by local offices of the staff judge<br />
advocate (SJA) to characterize employment relationship to identify appropriate taxes to be withheld and paid.<br />
(3) An individual who disputes the employment relationship may appeal directly to the IRS. Pending the final IRS<br />
decision, the individual will be treated as an employee or independent contractor, as determined by an SJA using the<br />
common law factors.<br />
b. Reporting independent contractor payments to the IRS will be in accordance with DOD 7000.14–R, volume 13.<br />
4–11. Taxes on employee tips<br />
a. Withheld compensation includes allowances for tips received by employees of food and beverage programs, as<br />
specified in appendix C. Addresses for requesting IRS publications and forms are found in DOD 7000.14–R, volume<br />
13.<br />
(1) Nonappropriated fund employees receiving tips in the amount of $20 or more in any month must report tip<br />
income to the employing NAFI/entity using IRS Publication 1244 and IRS Form 4070 (Employee’s Report of Tips to<br />
Employer) or a locally prescribed equivalent. Reports will be filed by the 10th of the month following the month in<br />
which tips were earned.<br />
(2) Each NAFI/entity employing more than 10 food service employees will file IRS Form 8027 (Employer’s Annual<br />
Information Return of Tip Income and Allocated Tips). See appendix C and the Tip Allocation and Tip Reporting<br />
Manager’s Guide found at www.armymwr.com.<br />
b. Federal income and employment tax records will be retained by the NAFI/entity for 4 years.<br />
4–12. Reporting prizes<br />
Nonappropriated fund instrumentalities/entities involved in awarding cash or merchandise prizes to individuals participating<br />
in contests or other such competitions will report awards in accordance with DOD 7000.14–R, volume 13,<br />
paragraph A1007.<br />
4–13. Annual reports to the Internal Revenue Service<br />
Returns made on IRS Forms 1099–MISC (Miscellaneous Income) and 1096 (Annual Summary and Transmittal of U.S.<br />
Information Return) for a calendar year will be filed with the appropriate IRS district by each NAFI/entity on or before<br />
28 February of the following year. A copy of IRS Form 1099–MISC will be sent to the person receiving payment from<br />
the NAFI/entity not later than 31 January of the year following payment from the NAFI/entity. Addresses for<br />
requesting IRS publications and forms are found in DOD 7000.14–R, volume 13. The contracting officer must provide<br />
proper information about the taxpayer to their servicing accounting office through the submission of an IRS Form W–9<br />
(Request for Taxpayer Identification Number and Certification) and provide the form with contractual documents.<br />
4–14. State and local sales and use taxes<br />
a. Nonappropriated fund instrumentality/entity operations are not subject to direct taxation by State or local tax<br />
authorities, except when specifically authorized by Federal statute. Nonappropriated fund instrumentalities/entities will<br />
cooperate with State and local officials to the degree that such cooperation is not construed as a submission to State<br />
and local regulations and control and such cooperation does not adversely affect MWR programs.<br />
b. Nonappropriated fund instrumentality/entity retail sales are not subject to State sales and use taxes, except for the<br />
sale of tobacco products and soft drinks through vending machines.<br />
(1) Sale of tobacco products exempt from State tax is limited to packs or equivalents for on-premises consumption.<br />
(Only the AAFES and commissary sales stores sell in bulk.) Other sales of tobacco products in the United States,<br />
including all vending machines sales, require payment of State sales tax.<br />
(2) Over-the-counter sales of soft drinks for immediate consumption at MWR snack food operations are exempt<br />
from State tax. (Only the AAFES outlets sell in bulk.) State sales taxes are paid for vending machine sales in the<br />
United States.<br />
c. The sale of State tax-free alcoholic beverages will be in accordance with chapter 10.<br />
d. State taxes on gasoline or other motor fuels measured by sales, purchases, storage, or use will be collected and<br />
paid under the provisions of 4 USC 104.<br />
<strong>AR</strong> <strong>215</strong>–1 • 31 July 2007<br />
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