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  • What is the latest FEDERAL CREDIT CARD PROGRAM GSA SmartPay® 3 Information?

What is the latest FEDERAL CREDIT CARD PROGRAM GSA SmartPay® 3 Information?

As of November 30, 2018, the federal government updated its credit card program.  The General Services Administration (GSA) has entered into contracts with Citibank and US Bank under the program named GSA SmartPay® 3.  (www.gsa.gov/gsasmartpay)  The following information is provided to assist Alabama vendors in determining whether or not tax applies to transactions paid by GSA SmartPay® 3 cards.

The GSA SmartPay® 3 program provides four business lines (card types):  Purchase, Travel, Fleet, and Integrated (includes fleet, travel and/or purchase functionality and offers a single card for all purchases.)  These cards/accounts can be Centrally Billed Accounts (CBAs) or Individually Billed Accounts (IBAs).

Centrally Billed Accounts (CBAs) are charge card accounts in which all charges are billed directly to the federal government and paid directly by the federal government to the issuing bank.  (Sales tax is not due on credit card purchases which are centrally billed to and paid by the federal government.  Lodgings tax is not due on charges for lodgings which are centrally billed to and paid by the federal government.)

Individually Billed Accounts (IBAs) are charge card accounts in which charges are paid directly by the cardholder/federal employee to the issuing bank; the federal employee is then reimbursed by the government.  (Sales tax and lodgings tax are due on credit card transactions where the purchases or charges for lodgings are billed to and paid by federal employees, who are then reimbursed by the federal government.)

Tax Advantage Travel Accounts (CBA/IBA) are charge card accounts in which charges for rental cars and lodging are paid directly by the federal government to the issuing bank and charges for travel-related purchases such as meals and incidentals are paid directly by the cardholder/federal employee to the issuing bank; the federal employee is then reimbursed by the government.  (Sales tax and lodgings tax are due on credit card transactions where the purchases or charges are billed to and paid by federal employees, who are then reimbursed by the federal government.)

  • Purchase Cards are for purchasing general supplies and services.  All federal government GSA SmartPay® 3 Purchase cards are centrally billed.  Therefore, transactions paid for with this card are tax-exempt.
  • Fleet Cards are for purchasing fuel and supplies for government vehicles.  All federal government GSA SmartPay® 3 Fleet cards are centrally billed. Purchases of tangible personal property paid for with this card are exempt from sales taxes. However, purchases of fuel paid for by this card are not exempt from state fuel excise taxes.
  • Travel Cards are for paying travel expenses related to official government travel (airline, hotel, meals, incidentals).  Federal government GSA SmartPay® 3 Travel cards may be centrally billed or individually billed.  The Travel card uses the 6th digit of the account number to identify whether the account is a Centrally Billed Account or an Individually Billed Account.  If the sixth digit is 1, 2, 3, or 4, the transactions against the Travel card are individually billed to the federal employee, and, therefore, the transactions are subject to applicable taxes.  See the chart below.
  • Integrated Cards – Two or more business lines (card types) whose processes are integrated into one card.
    • All Fleet and Purchase type transactions on a GSA SmartPay® 3 integrated card are centrally billed. Purchases of tangible personal property paid for with this card are exempt from sales taxes. However, purchases of fuel paid for by this card are not exempt from state fuel excise taxes.
    • Travel functionality on a GSA SmartPay® 3 integrated card may be centrally billed or individually billed.  The numbering structure for Integrated Cards to differentiate between centrally and/or individually billed transactions will be specific to each agency / organization using the integrated card.  This information will be provided on the GSA SmartPay® website (www.gsa.gov/gsasmartpay) as it becomes available.

Department of the Interior:  With the exception of the purchase of meals and incidental travel expenses which are individually billed and subject to sales tax, transactions paid for with the Department of the Interior’s integrated card are centrally billed and exempt from sales and lodgings tax. Purchases of fuel paid for by this card are not exempt from state fuel excise taxes.

The Department of the Interior GSA SmartPay® 3 charge cards can be identified by their unique prefixes and account numbers, government-designed artwork, and wording that indicates that the card is for official transactions for the U. S. Government.  The Department of the Interior Integrated Card account numbers begin with 5568 26.

Purchase
Travel
Fleet
     
Prefix (1st four digits)
4614 – Visa
4715 – Visa
4716 – Visa
5565 – MasterCard
5568 – MasterCard
4614 – Visa
4615 – Visa
4716 – Visa
4486 – Visa
5565 – MasterCard
5568 – MasterCard
4614 – Visa
4486 – Visa
5563 – MasterCard
5565 – MasterCard
5568 – MasterCard
5565 – WEX
6900 – WEX
7071 – WEX
7088 – Voyager
6th Digit
NA
0
CBA
1
IBA
2 – 4
IBA
5
CBA/IBA*
6 – 9
CBA
NA

*Tax Advantage card purchases are centrally billed for lodgings and rental car expenses and individually billed for meals and incidentals.

Related FAQs in General - Sales and Use

The ONE SPOT system will allow returns to be filed with ACH Debit and ACH Credit method payments only. The system will not allow an ACH Debit taxpayer to complete their return filing without completing the necessary information to authorize the ACH Debit payment. The ACH Credit payment is separate from the ONE SPOT system and must be initiated by the taxpayer through their banking institution. Returns successfully submitted for ACH Debit and ACH Credit taxpayers will be exported to the local government.

Upon the completion of the Third Party Designation Form, ALDOR can provide the returns, payments and payment data files to the authorized third party administrator.

When an electronic payment is received by ALDOR in error, the payment will post to the taxpayer’s ALDOR local tax account. ALDOR will not be able to automatically transfer these payments to the non-administered local government due to the possibility the taxpayer’s payment will reject after ALDOR has transferred the payment, causing complicated collection issues. ALDOR will need the taxpayer to advise the Department with what to do with that payment.

The only non-administered local government taxes to be processed through ALDOR will be payments received as the result of legal action, such as final assessment, garnishments, and liens, entered into when the local government was state administered. Payment data for these payments will be available during the first week (5-10 working days) of the month following the tax collection period through the ALDOR website.