rr-98-24.pdf

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# Part I

Section 4041. -- Imposition of Tax

26 CFR 48.4041-3: Application of tax on sales of special motor
fuel for use in motor vehicles and motorboats.
(Also §§ 4071, 4081, 4091, 4161; 48.4071-1, 48.4081-2,
48.4161 (a)-1, 48.4161 (b)-1.)

## Rev. Rul. 98-24

This revenue ruling modifies Rev. Rul. 73-198, 1973-1 C.B.
425, which discusses exemptions from certain federal excise taxes
extended to foreign diplomatic, consular, and other officers, and
agencies or commissions of foreign governments.

Rev. Rul. 73-198 provides that if ambassadors, ministers,
other duly accredited diplomatic representatives of foreign
governments, the members of their families living with them,
members of their households (but not servants), attaches,
secretaries, clerks, and also officers of missions to the United
Nations and the Organization of American States serving in a
representative capacity and family members living with such
officers, purchase from the manufacturer thereof an article
otherwise subject to a federal excise tax on sales by
manufacturers, or purchase from a retailer an article otherwise
subject to a federal excise tax on sales by retailers, the
transaction will not be taxed. Rev. Rul. 73-198 does not extend
this benefit to consular officers and employees of foreign
governments and members of their families forming part of their
households.

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Under section 201(c) of the Foreign Missions Act, 22 U.S.C.
§ 4301 (1994), the Secretary of State is authorized to determine
the treatment that should be accorded a foreign mission in the
United States based on due consideration of the benefits,
privileges, and immunities provided to missions of the United
States in the country or territory represented by the foreign
mission. The Secretary of State, after due consideration of the
benefits, privileges, and immunities provided to missions of the
United States under the Vienna Convention on Consular Relations
and other governing treaties, has determined that if consular
officers and employees (not including honorary consuls) and
members of their families forming part of their households
purchase from the manufacturer thereof an article otherwise
subject to a federal excise tax on sales by manufacturers, or
purchase from a retailer an article otherwise subject to a
federal excise tax on sales by retailers, the transaction will
not be taxed.

This benefit does not extend to U.S. nationals or permanent
residents of the United States or to consular officers and
employees (and their family members) of a consular mission
representing a country or territory that does not provide
benefits, privileges, and immunities to missions of the United
States on a reciprocal basis as determined by the Secretary of
State. "Consular officer" is defined as any person, including
the head of a consular post, entrusted in that capacity with the
exercise of consular functions, and "consular employee" is

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defined as any person employed in the administrative or technical
service of the consular post.

As a result of this revenue ruling, Rev. Rul. 68-352, 1968-2
C.B. 487, is no longer determinative of the exemption from
federal retailers and manufacturers excise taxes with respect to
consular officers and employees (not including honorary consuls)
of the Government of France and members of their families forming
part of their households. Accordingly, Rev. Rul. 68-352 is
declared obsolete.

EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 73-198 is modified. Rev. Rul. 68-352 is
obsoleted.

# DRAFTING INFORMATION

The principal author of this revenue ruling is Susan Athy
of the Office of Assistant Chief Counsel (Passthroughs and
Special Industries). For further information regarding this
revenue ruling contact Susan Athy on (202) 622-3130 (not a toll-
free call) .