The General Services Administration (GSA) has begun issuing US Government credit cards beginning with "5565" under its new SmartPay2 program. This is in addition to cards previously issued beginning with 5568, 4486,and 4716. Only those cards with a sixth digit of either 0, 6, 7, 8, or 9 are exempt from State and Local Sales Taxes and local Occupancy Taxes.
Lodging properties are required to collect the State and Local Sales Tax and local occupancy tax on federal government credit cards beginning with these same numbers but with a sixth digit of 1, 2, 3, or 4.
Failure to collect the tax from the federal government traveler does not relieve the lodging property of its legal responsibility to remit to the NC Department of Revenue the dollar amount of taxes due from the transaction. Similarly, occupancy taxes due to local governments must be remitted even if the taxes are not collected. The North Carolina Department of Revenue has revised Section 37 of the State's Sales and Use Tax Bulletin to reflect changes made by GSA.
HANC has prepared an easy to read poster for use by front line and guest service staff to identify federal government credit cards that are exempt. The 8 1/2 X 11 inch poster is equally useful as a tool in explaining North Carolina law to federal government travelers with credit cards that are not exempt. (3-12-2009)
Download Poster for Guest Services and Front Office
