Print This PageTest your knowledge on GSA SmartPay state tax issues by taking the SmartTax Quiz! You can also download our Tax Knowledge Checklist to help you in preparing for your trip.
1.) What should I do if a state exempts taxes but the vendor does not recognize the exemption?
a. Refuse to pay the bill in its entirety
b. Pay the tax and plan to reclaim the tax later
Answer: B. You should pay the tax and immediately report the incorrectly assessed tax to your A/
OPC so he/she can initiate the reclamation process.
2.) Who determines exemption status for Individually Billed Accounts?
a. GSA
b. The states
c. The agency
d. The vendors
e. Congress
Answer: B. The states determine the exemption status for Individually Billed Accounts.
3.) Are GSA SmartPay Purchase Cards Exempt in all 50 states?
a. Yes
b. No
Answer: A. Yes. The federal government may not be assessed taxes on centrally billed
accounts, where the government is directly liable for the payment. This would be a violation of
the Supremacy Clause of the Constitution, and of case law which has set precedent that states
may not levy taxes directly on the federal government.
4.) GSA SmartPay Purchase Cards and GSA SmartPay Fleet Cards are exempt from taxes in
all States because:
a. They are government charge cards
b. Because GSA is designated as “exempt”
c. Congress determined it
d. The government is responsible for payment
Answer: D. The GSA SmartPay Purchase Cards and Fleet Cards are exempt from taxes in
all states since they are centrally billed accounts, where the government is responsible for the
payment.
5.) How many states currently exempt federal travelers from state taxes with individually billed
travel cards?
a. Nine
b. Eleven
c. Fifty
d. None
Answer: B. There are 11 states which currently exempt federal travelers form state taxes with
individually billed travel cards. They are: Alaska, Florida, Delaware, Kansas, Massachusetts,
Missouri, New York, Oregon, Pennsylvania, Texas and Wisconsin
6.) Does every tax exempt state require a form in order to be tax exempt?
a. Yes
b. No
Answer: B. No, only 5 of the 11 states which exempt taxes to individually billed cards require a
form. These 6 states are: Florida, Kansas, New York, Pennsylvania, Texas and Wisconsin
7.) Is the federal government required to pay the bag tax in DC or Montgomery County, MD, with
a centrally billed card?
a. Yes
b. No
Answer: B. No, a state may not assess taxes to the federal government on the centrally billed
purchase card since the government is responsible for the payment, and therefore assessing tax
would be a violation of the Supremacy Clause of the Constitution.
8.) Which items are to bring with you on government travel?
a. Government Travel Card
b. Government ID
c. Necessary Tax Forms, or SmartPay website/phone number
d. All of the above
Answer: D. Federal government employees should bring their GSA SmartPay Travel Card, their
Government ID, and Necessary Tax Forms or the SmartPay website/phone number with them on
official government travel.
9.) What should you do if you are incorrectly assessed taxes in a state?
a. Contact your A/OPC as soon as possible, so he/she can begin the reclamation process
b. Call your Travel Agent
c. Nothing
Answer: A. If you are incorrectly assessed taxes in a state, you should contact your A/OPC as
soon as possible so he/she can begin the reclamation process.
10.) In an exempted state, is the cardholder responsible for county and city taxes as well as
other hotel fees (which are included on the bill in addition to the occupancy/lodging tax)?
a. Yes
b. No
Answer: A. Yes, the cardholder will be responsible for paying the county and city tax, as well as
other hotel fees, since the exemption only applies to lodging or occupancy tax.
11.) Which clause in the U.S. Constitution has enabled precedent to be set that states are not
permitted to levy certain taxes directly on the federal government?
a. Commerce
b. Supremacy
c. Elastic
d. Punishment
Answer: B. The Supremacy Clause states that the U.S. Constitution “shall be the supreme law of
the land; and the judges in every state shall be bound thereby, anything in the constitution of laws
of any state to the contrary notwithstanding.” McCulloch vs. Maryland and other court cases have
used this clause to set precedent that states are not permitted to levy taxes directly on the federal
government.
12.) Is it illegal for a merchant to photocopy your government ID?
a. Yes
b. No
Answer: A. Yes, according to US Code Title 18, Part 1, Chapter 33, 701, it is illegal for a
merchant to photocopy your government ID. The merchant is also not permitted to photocopy
your GSA SmartPay card.
