The Secretary of State to the Irish Minister ( MacWhite )

Sir: The request contained in your Legation’s note of February 7, 1929, for the repayment to you of the taxes which have been assessed against the building now occupied by your Legation in the proportion corresponding to that part of the building occupied by the Legation has received the careful consideration of this Department.

It is, however, regretted that it will not be possible to render you the assistance you ask, and, in this connection, I am enclosing, as of [Page 235] possible interest to you, a copy of the pertinent portion of the opinion of the Solicitor of the Department of State in this regard.

I have to inform you that I am in entire agreement with the opinion expressed by the Solicitor.

Accept [etc.]

For the Secretary of State:
W. R. Castle, Jr.

Excerpt From Opinion Expressed by the Solicitor of the Department of State

Questions somewhat similar to that raised in the note of February 7, 1929, from the Legation of the Irish Free State have been considered several times by this Department. As long ago as May 22, 1912, and it is clear that there are other earlier cases, this office prepared a memorandum reviewing the authorities and reaching the conclusion that:

“No authorities have gone so far as to lay down the rule that, irrespective of ownership, property used for diplomatic purposes should be exempt from taxation. Such exemption would clearly seem unwarranted even under a most liberal interpretation of the general principle that a diplomatic officer is exempt from local jurisdiction and enjoys certain immunities in order that he may not be interfered with in the discharge of his official duties. Whatever might be the proceedings employed in collecting the tax under such circumstances, no process would be served on the diplomatic officer occupying the rented property, and in no way would there be any attempt to subject him to local jurisdiction. The possibility that he would be disturbed in the possession of the premises under his lease as a result of the title passing from the owner in case of such owner’s failure to pay the taxes would be extremely remote, and such a situation would likely have no bearing on the general principle in question.”

The following statement from Volume IV, Moore’s International Law Digest, 670–671, is of interest in this connection:

“In reply to your letter of the 23rd ultimo, I have to say that the rule observed by this Government with respect to the taxation of property owned by a foreign government and occupied as its legation, is to accord reciprocity in regard to general taxation but not to specially exempt it from local assessments, such as water rent and the like, unless it were definitely understood that these taxes would also be exempted by the foreign government upon a piece of property belonging to the United States and used for a like purpose by our minister. …

“When a foreign legation occupies rented property in this country, the owner of the premises is not exempted from the payment of all lawful taxes.” (Mr. Bayard, Secretary of State, to Mr. Woolsey, April 15, 1886.)

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In a circular instruction to diplomatic and consular officers the Department stated in part as follows:

“The taxes on the sales of automobiles and jewelry provided for in Sections 600 and 604 of the Revenue Act of 19241 are taxes imposed upon the manufacturers of automobiles and upon the vendors of jewelry. In the collection of such taxes the Government looks to the manufacturer and to the vendor for the payment of the tax and not to the purchasers of the articles. For this reason and the further reason that the price of the article sold is a matter of negotiation between the vendor and the purchasers, the appropriate authorities of this Government have taken the position that no exemption from the payment of those taxes can be granted to the manufacturer or vendor by reason of the fact that the sale is made to a diplomatic representative of a foreign government.”

The question submitted by the Legation of the Irish Free State would seem to be similar to the case of the sale of automobiles. The matter of the payment of the tax by the Legation is entirely a matter between the owner of the property and the Legation. If the payment of the tax is assumed under the lease it would seem that it would not be possible to give favorable consideration to the request of the Legation. As pointed out above, the owner of the premises would not be exempt from the payment of the taxes and if he finds it necessary to insert a provision in the lease whereby the Legation is required to assume the payment of the tax and the Legation signs such lease, that is a matter beyond the jurisdiction of this government to control.

  1. 43 Stat. 253, 322, 324.