lapse of time for final settlement under any form of retrospective rating plan of insurance. Therefore, where a retrospective plan of insurance is involved, the contracting officer shall take action, at the time of contract settlement, to ensure that any appropriate remaining credits due the contractor in connection with the insurance will be paid to the Government and any appropriate outstanding obligations of the contractor with respect to insurance will be assumed by the Government. This action shall be accomplished through execution of one of the two types of assignment form set forth in paragraph (c) of this section, or in § 10.604 of this title, as appropriate. (b) In the event the Government has less than a 100 percent interest in premium refunds or dividends, the assignment shall be appropriately modified to reflect the percentage of the Government's interest in premium refunds or dividends and the extent of the Government's assumption of additional premium obligation. Assignments to the Government shall be executed in sufficient copies to serve the purposes of the cognizant procuring activity. After the original and all copies have been executed by the contractor and the Government, the contracting officer shall dispatch them by registered mail, return receipt requested, to the home office of the insurance company involved for signature by an officer of the company. The letter accompanying the forms shall specify that all checks to cover return premiums and dividends are to be made payable to the Treasurer of the United States and forwarded to the contracting officer with advice as to the contract to which it applies. (c) The format set forth below shall be used in connection with insurance policies not issued under the National Defense Projects Rating Plan or War Department Insurance Rating Plan when the Government has assumed the contractor's obligations for further premium payments under the policies. ASSIGNMENT TO GOVERNMENT It is agreed that the return premium and dividend due or to become due the insured under Policy No. ------ are hereby assigned to and shall be paid to the United States of America, and the Contractor directs the company to make such payments to the Treasurer of the United States acting for and on account of the United States of America. 1 Omit "and dividend," if nondividend paying company. [31 F.R. 9974, July 22, 1966, as amended at 82 F.R. 2623, Feb. 8, 1967] Subpart F-Special Casualty § 600.650 Application of National Defense Projects Rating Plan. (a) The procedures applicable to the operation of this Plan are set forth in detail in Bulletins issued by the Conference Committee on the National Defense Projects Rating Plan, 10th Floor, 200 East 42d Street, New York 17, N.Y. The documents required and procedures normally followed are outlined below. (b) It is often advantageous to the Government to combine the insurance for several cost-reimbursement type contracts under one National Defense Projects Rating Plan project for premium settlement purposes. The contracts involved may have been negotiated by diferent procuring activities or by the Departments of the Navy and the Air Force, in which case §§ 600.352 and 600.553 (d) apply. Situations where combinations of contracts may be advisable are where work under several contracts is performed: (1) At the same location at the same time by different contractors, such as an architect-engineer and a construction contractor; (2) At the same location at different times by the same or different contractors, such as construction and operation contracts at a GovernmentOwned Contractor-Operated plant or aircraft maintenance contracts which are replaced periodically by new contracts; or (3) At different locations by the same contractor, such as one division of a contractor performing mostly cost-reimbursement type contracts. § 600.651 Insurance advisors. (a) Contractor's right to select an insurance advisor. When the insurance program is administered under the National Defense Projects Rating Plan for contracts within the United States, the contractor may select a licensed insurance agent or broker as insurance advisor to represent him in connection with the insurance coverages under the Plan. If a contractor selects an insurance advisor, the advisor shall submit a statement of his qualifications through the contractor to the contracting officer for approval. The statement should include a description of the experience of the firm or individual, location of the office from which the risk will be serviced, and a list of other Government contracts which the advisor has serviced or is presently servicing. After the individual or firm has been approved by the contracting officer, the contractor may enter into the service agreement in paragraph (b) of this section with his insurance advisor. (b) Insurance advisor's quarterly statement of earned fee. The insurance advisor shall bill the contractor each quarter for his fee in accordance with the schedule of percentages outlined in the insurance service agreement. The following format shall be used in the preparation of the fee statement: INSURANCE ADVISOR'S QUARTERLY STATEMENT OF EARNED FEE (Insurance Advisor) By Title PART 601-TAXES Resolution of tax problems. Implementation of part. Sec. 601.000 601.050 Subpart A-[Reserved] Subpart B-[Reserved] Colorado sales and use tax-con- Indiana sales and use tax-con- Subpart D-[Reserved] Subpart E-Tax Exemption Forms State and local taxes. 601.502 601.502-1 Types of evidence of exemption. 601.502-50 Tax inclusive purchases. AUTHORITY: The provisions of this Part 601 issued under secs. 2301-2314, 3012, 70A Stat. 127-133, 157; 10 U.S.C. 2301-2314, 3012. SOURCE: The provisions of this Part 601 appear at 34 F.R. 9525, June 18, 1969, unless otherwise noted. § 601.000 Resolution of tax problems. (a) Actual or anticipated tax problems which cannot readily be solved by reference to Part 11 of this title shall be forwarded to The Judge Advocate General, address: HQDA (DAJA-PL), through procurement channels (see 591.150 (d)). Direct communication with The Judge Advocate General is authorized if the time by which a solution to a tax problem is required is so short that communication through channels would be inadequate. (b) Tax problems forwarded shall be accompanied by (1) A comprehensive statement of pertinent facts, including documents and correspondence pertinent thereto; (2) A copy of the contract or pertinent portions thereof; (3) A review of the legal and factual issues involved; (4) A statement of the effect of the tax problem on procurement policies and procedures, if appropriate; and (5) The comments and recommendations of the contracting officer and of each successive echelon of command through which the correspondence passes. [35 F.R. 4131, Mar. 5, 1970, as amended at 87 FR 7088, Apr. 8, 1972] § 601.050 Implementation of part. No directive, regulation, instruction, or procedure concerning Federal, State, or local taxes in relation to Army procure Subpart C-State and Local Taxes § 601.350 Colorado sales and use tax construction contracts. (a) A specific exemption from Colorado sales and use tax is available with respect to materials having a value of $2,500 or more furnished under contract to a Government agency and incorporated into a structure by a prime contractor or subcontractor. (b) Tax exemption certificates shall be issued to contractors or subcontractors upon their personal application therefor to the Department of Revenue, State of Colorado, State Capitol, Denver, Colo. 80203. The contractor or subcontractor shall be required to furnish (1) The contract number, date, and amount; and (2) The proposed date of completion. (c) Solicitations for construction contracts which may reasonably be expected to involve purchases of materials of $2,500 or more shall contain (1) A notification concerning the availability of this exemption; (2) A requirement that Colorado sales and use taxes be excluded from prices; and (3) The method by which contractors or subcontractors may obtain tax exemption certificates. § 601.351 Indiana gross income tax. (a) The Indiana gross income tax is applicable to gross receipts received by a Government contractor under a or freight station in Indiana for shipment on a Government bill of lading to destinations outside Indiana). (b) The tax does not apply to gross receipts received by a Government contractor under a contract for supplies produced in Indiana and delivered to the Government at a destination outside Indiana if (1) The contract provides that title to the supplies shall vest in the Government at destination; and (2) Shipment is made on a commercial bill of lading or a commercial bill of lading convertible to a Government bill of lading at destination. § 601.352 Iowa sales and use tax-construction contracts. (a) Government agencies may obtain from the Iowa State Tax Commission refunds of sales and use tax paid by their construction contractors with respect to goods, wares, or merchandise which becomes an integral part of a construction project. (b) The contracting officer shall obtain from the contractor the statement required by section 422.45 (7a), Iowa Code Annotated, and shall file an application for refund with the Iowa State Tax Commission within 60 days after final settlement as required by section 422.45 (7b), Iowa Code Annotated. (c) Solicitations for construction projects to be performed in Iowa shall contain a provision that the Contractor will be required to furnish the Contracting Officer with the statements required by section 422.45 (7a), Iowa Code Annotated. § 601.353 Indiana sales and use taxconstruction contracts. (a) A construction contractor or subcontractor may purchase materials free of the Indiana Sales and Use Tax if the contract or subcontract provides separate amounts applicable to the performance of services and the furnishing of materials. Tangible personal property purchased for use in fulfilling contract for the improvement of real estate for the United States is not subject to these taxes. (b) Solicitations for fixed price construction contracts to be performed in Indiana shall contain the following statements (1) The contract to be awarded will be a construction contract which separately states amounts applicable to the performance of services and the furnishing of materials as contemplated in State of Indiana, Department of Revenue Circular ST-21 (Revised) dated July 1, 1969. Exemption from the Indiana Sales and Use Tax on material to be incorporated by the contractor and his subcontractors into the structure or improvement to real estate may be secured under the terms of the cited circular. The successful bidder to whom this contract is awarded should provide his supplier with a State of Indiana General Exemption Certificate (Form ST-105) with respect to such property. (2) Prior to award of a contract, the successful bidder shall furnish a breakdown to be incorporated into the contract separately pricing: (i) Materials to be incorporated into the structure or improvement to real estate, (ii) services and other obligations of the construction contract, and (iii) total contract price. (c) The following clause shall be inIcluded in solicitations for fixed-price construction contracts to be performed in Indiana INDIANA SALES AND USE TAX (JANUARY 1971) (a) This contract is a construction contract which contains separate amounts applicable to the performance of the services and the furnishing of the materials as defined in State of Indiana, Department of Revenue Circular ST-21 (Revised) dated July 1, 1969. Notwithstanding any other provisions of this contract, the contract price does not include any amount for Indiana Sales and Use Tax on materials to be incorporated by the contractor or any subcontractor into the structure or improvement to real estate. The contractor or any subcontractor should provide his supplier with a State of Indiana General Exemption Certificate (Form ST-105) with respect to such property. (b) For the purpose of complying with the requirements of State of Indiana, Department of Revenue Circular ST-21 (Revised) dated July 1, 1969, the contractor, pursuant to the requirements of the solicitation has furnished prior to contract award a breakdown separately pricing: (1) Materials to be incorporated into the structure or improvement to real estate, (2) services and other obligations of the construction contract, and (3) total contract price. This breakdown is for the sole purpose of complying with the requirements of State of Indiana, Department of Revenue Circular ST-21 (Revised) dated July 1, 1969 with regard to separate pricing of services and materials and has no other contractual significance. (c) Any subcontracts awarded hereunder shall also contain separate amounts applicable to the performance of services and the furnishing of materials. (d) At the time the contract is prepared for signature, a statement substantially as follows shall be included in the schedule-- It is understood and agreed that the contract price of $------ is comprised of $-----for materials and for services and other obligations. (e) Invoices submitted by a contractor performing a cost reimbursement type construction contract normally include a breakdown between materials and services and thus would qualify for exemption from tax under the cited circular. Where such breakdowns are not furnished by the contractor, they should be obtained. To the extent that subcontracts are involved, the prime contractor should be requested to obtain comparable breakdown between materials and services from subcontractors. [36 F.R. 20683, Oct. 28, 1971] § 601.354 Kansas sales and use taxconstruction contracts. Kansas Law (Kans. Stats. Anno. sec. 79-3606, as amended by Kansas Senate bill No. 398, effective April 9, 1971), provides that all sales of tangible personal property or services purchased by a contractor for the erection, repair, or enlargement of buildings or other projects for the United States, its agencies or instrumentalities shall be exempt from Kansas retailers' sales tax and compensating (use) tax. Upon award of the contract, the contracting officer should request the Department of Revenue, State of Kansas, Topeka, Kans. 66612 to issue an exemption certificate number for the project; and should furnish to the State the following information: Kind of project; location of project; date of contract; contract number; name and address of the contractor and the subcontractors. The contractor and the subcontractors should utilize the exemption certificate number, and furnish copies of invoices to the contracting officer, as indicated in the following clause. The contracting officer, upon completion of the project, should certify to the State that all purchases so made were entitled to exemption under K.S.A., sec. 79-3606(e), as required by the following clause. (b) The following clause shall be used in all construction contracts for $10,000 or more to be performed in Kansas. This clause may be included in construction contracts for less than $10,000 to be performed in Kansas if the contracting officer considers it practicable to use the clause: KANSAS SALES AND USE TAX (APRIL 1971) Notwithstanding any other provision of this contract, the contract price excludes the Kansas retailers' sales tax and compensating (use) tax on all sales of tangible personal property or services purchased by the contractor or subcontractors for the erection. repair, or enlargement of buildings or other projects called for by this contract. In accordance with Kan. Stats. Anno., sec. 793606 (e), as approved April 9, 1971, the contracting officer will obtain from the State and furnish to the contractor an exemption certificate for this project for use by the contractor and subcontractors in the purchase of materials for incorporation in the project and of services. The contractor and the subcontractors shall furnish the number of such certificate to all suppliers from whom such purchases are made, and the suppliers shall execute invoices covering the same bearing the number of such certificate. The contractor shall furnish copies of all such invoices to the contracting officer, who, upon completion of the project shall certify to the State that, upon information and belief, all purchases so made, based upon invoices furnished by the contractor, were entitled to exemption under said K.S.A., sec. 79–3606 (●). [36 F.R. 20683, Oct. 28, 1971] Subpart D-[Reserved] Subpart E-Tax Exemption Forms § 601.502 State and local taxes. § 601.502-1 Types of evidence of exemption. Heads of procuring activities and contracting officers and their representatives are authorized to furnish evidence of exemption from State and local taxes. [37 FR 25927, Dec. 6, 1972] § 601.502-50 Tax inclusive purchases. (a) When a State or local tax attaches at the time of sale to the United States, |