---
kind: "section"
citation: "48 C.F.R. § 29.401-3"
title: "48"
number: "29.401-3"
heading: "Federal, State, and local taxes."
url: "https://uscodex.org/cfr/48/29.401-3"
---

# §29.401-3. Federal, State, and local taxes.

- (a) Except as provided in [paragraph (b)](#b) of this section, insert the clause at 52.229-3, Federal, State, and Local Taxes, in solicitations and contracts if—
  - (1) The contract is to be performed wholly or partly in the United States or its outlying areas;
  - (2) A fixed-price contract is contemplated; and
  - (3) **The contract is expected to exceed the simplified acquisition threshold.**
- (b) In a noncompetitive contract that meets all the conditions in [paragraph (a)](#a) of this section, the contracting officer may insert the clause at 52.229-4, Federal, State, and Local Taxes (State and Local Adjustments), instead of the clause at 52.229-3, if the price would otherwise include an inappropriate contingency for potential postaward change(s) in State or local taxes.

## Notes

### Amendments

[68 FR 13205, Mar. 18, 2003, as amended at 68 FR 28083, May 22, 2003]

### Authority

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

### Source

Source: 48 FR 42293, Sept. 19, 1983, unless otherwise noted.

### Amendments

[68 FR 13205, Mar. 18, 2003, as amended at 68 FR 28083, May 22, 2003]