ADDITIONAL_QUESTIONS_AND_ANSWERS.docx

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CSU-East Lodging Services for CIVMARs at NOB, Norfolk, VA 23511
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N32205-18-Q-0155
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ADDITIONAL QUESTIONS AND ANSWERS

QUESTION: For awards made to a third party agency, the third party agency invoices the NAVY and pays the hotel directly. Any payment coming from the third party to the hotel is not tax exempt. This is an IRS mandate / rule. When you state that you provide tax exempt certificates, can you further explain that you are tax exempt only to the agency you pay directly and advise that you do not authorize or suggest that any third party agency are tax exempt? Many third party planners do not know this rule so they come in 12-18% below due to their offers not including taxes. This puts companies who are following the rules at a disadvantage. It is understood that no taxes are charged to the NAVY from the third party. Additionally, these third party planners who are not charging taxes may have to pay back these taxes later if they are every audited. I’ve seen other government agencies request all taxes be disclosed. With a contract of this size, these taxes could be as high as $75,000.00.

I appreciate your help, advice and guidance on this issue. I’m hoping to get GSA to better disclose the rules for this to protect third parties and allow for an even playing field for all.

ANSWER: Sorry I did not fully explain the Tax Certificate for lodging services. MSC issue tax exemption certificates for Government employees ONLY for hotel lodging on official travel status. This contract if awarded, MSC CIVMARs should be tax exempted from lodging taxes too.

In addition, MSC do not get involved in the operations of your contracts with the Government.

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