Administracja i zamówienia · 12/08/1998

Federal Acquisition Regulation; Taxes Associated With Divested Segments

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have decided to withdraw the proposed rule published in the Federal Register at 62 FR 49903, September 23, 1997 (FAR Case 97-010, Taxes Associated with Divested Segments). When a contractor discontinues operations through the sale or other transfer of ownership of a segment, the contractor may be assessed state and local taxes on the gain resulting from that sale or transfer. Since the Government does not share in the gain resulting from the segment sale or transfer, the Government should not share in any tax increases resulting from the segment sale or transfer. The rule proposed revisions to Federal Acquisition Regulation 31.205-41, Taxes, to add increased taxes resulting from a contractor's sale or other transfer of ownership of a segment to the list of unallowable costs. The respondents expressed concern that the rule would place a significant administrative burden on contractors by requiring them to compute state and local taxes twice: once to determine the actual taxes and again to assess the taxes that would have been paid had the segment not been sold. The DoD, GSA, and NASA have decided