Federal Government, Its Agencies, and Instrumentalities

The federal government, its agencies, and instrumentalities are exempt from tax. Agencies and instrumentalities are divisions of the federal government that serve a specific purpose.

Examples of federal agencies and instrumentalities:

• American Red Cross
• Central Intelligence Agency
• Federal Trade Commission
• Social Security Administration
• Federal credit unions
• Federal reserve banks

View a list of federal agencies and instrumentalities on the Federal Register.

The following organizations do not qualify for the federal government exemption and their purchases are taxable:

• Federally chartered banks and savings and loans
• State chartered credit unions, banks, and savings and loans

For more information, see Revenue Notice 96-06, Exempt Entities.