48 CFR § 29.401-3 - 29.401-3 Federal, State, and local taxes.
---
identifier: "/us/cfr/t48/s29.401-3"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 29.401-3 - 29.401-3 Federal, State, and local taxes."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "29.401-3"
section_name: "29.401-3 Federal, State, and local taxes."
chapter_number: 1
chapter_name: "FEDERAL ACQUISITION REGULATION"
subchapter_number: "E"
subchapter_name: "GENERAL CONTRACTING REQUIREMENTS"
part_number: "29"
part_name: "TAXES"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
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."
regulatory_source: "48 FR 42293, Sept. 19, 1983, unless otherwise noted."
cfr_part: "29"
---
# 29.401-3 29.401-3 Federal, State, and local taxes.
(a) Except as provided in paragraph (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) 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.
[68 FR 13205, Mar. 18, 2003, as amended at 68 FR 28083, May 22, 2003]