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.