Tax Exempt Question with Regards to a Prime Contractor
Started by tjsmith1957 · Oct 17, 2023 · 9 replies
- tOriginal post
tjsmith1957
Oct 17, 2023 · 2y ago
Iam working with a Prime Contractor on a program and we have submitted our proposal. However, the Prime Contractor has asked us if we are tax exempt and we are not.
The Prime Contractor states: "The Government does not add additional funding for this program to cover taxes as the Prime Contractor is tax exempt."
The award will be a FFP for imagery, our pricing is all inclusive of our indirects, taxes, fee etc. This award will be a single source to my company.
The Prime Contractor is asking if all items will be procured from my company or if we are utilizing subcontractors and that is what is causing the taxes. All work will be performed by my company.
I am totally confused by this Prime, again my company is tax exempt so not sure what it is the Prime wants or needs from me.
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ji20874
Oct 17, 2023 · 2y ago
You might ask your prime contractor to tell you which clause(s) numbered FAR 52.229-xx are included in the prime contract and will flow down to your subcontract. Then, you can read that clause and know how to comply.
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Neil Roberts
Oct 17, 2023 · 2y ago
@tjsmith1957...so, is your company tax exempt or not?
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Retreadfed
Oct 17, 2023 · 2y ago
tjsmith1957 said:
the Prime Contractor has asked us if we are tax exempt and we are not.
Exempt from what taxes?
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tjsmith1957
Oct 17, 2023 · 2y ago
We are not tax exempt, and not sure from what taxes as I cannot get a straight answer. All they state is that they are
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Neil Roberts
Oct 17, 2023 · 2y ago
tjsmith1957 said:
I am working with a Prime Contractor on a program and we have submitted our proposal.
You should have received an RFP or ITQ that states the terms and conditions and reviewed it. If there were none, I would amend the proposal to add a response to what you were asked by the prime...something like, the proposed price does not include applicable taxes.
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here_2_help
Oct 23, 2023 · 2y ago
Ask the prime to flow down to you their exemption certificate.
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Retreadfed
Oct 23, 2023 · 2y ago
On 10/17/2023 at 1:37 PM, tjsmith1957 said:
"The Government does not add additional funding for this program to cover taxes as the Prime Contractor is tax exempt."
Why would "additional funding" be needed? Taxes should be an element included in your indirect cost rates.
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C Culham
Oct 23, 2023 · 2y ago
On 10/17/2023 at 2:29 PM, tjsmith1957 said:
We are not tax exempt, and not sure from what taxes as I cannot get a straight answer. All they state is that they are
Did you know that if you are registered in SAM.gov that you can establish a Login account that allows you to view the general registration of any firm in SAM.gov? Looking up the prime and viewing their core business info might give you an idea of exemption. I say this profit status of business is shown. It would seem to me that if the prime is a for profit business they would not be exempt from taxes. I like here_2_help's response too.
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general_correspondence
Oct 23, 2023 · 2y ago
The prime simply needs to flow down their tax exemption certificate for the subcontractors use.