Board of Contract Appeals General Services Administration Washington, D.C. 20405 _______________________ September 1, 1998 _______________________ GSBCA 14350-RELO In the Matter of ROBERT J. SZERSZYNSKI Robert J. Szerszynski, Havre de Grace, MD, Claimant. Laura Rothenberg Haug, Deputy Chief Counsel, Office of the Chief Counsel and Staff Judge Advocate, Headquarters, U.S. Army Test and Evaluation Command, Aberdeen Proving Ground, MD, appearing for Department of the Army. HYATT, Board Judge. Claimant, Robert J. Szerszynski, is a civilian employee of the Department of the Army. In August 1997 he purchased a home in Havre de Grace, Maryland incident to a permanent change of station (PCS) from Fort Hood, Texas to the Army Test and Evaluation Command at Aberdeen Proving Ground. In connection with the purchase of this house he seeks review of the Army's denial of reimbursement of a funding fee assessed by the Department of Veterans Affairs (VA) and the state transfer tax. The VA Funding Fee The Army denied reimbursement of the funding fee based on paragraph C14002- A.4.b.(7) of the Joint Travel Regulations (JTR), which explicitly states that the VA funding fee is a nonreimbursable item of expense associated with the sale or purchase of a residence. The JTR provision cited by the Army adopts the holding of a Comptroller General decision that the VA funding fee is part of the finance charge and, therefore, not reimbursable. Anders E. Flodin, 64 Comp. Gen. 674 (1985). Although claimant characterized the amount claimed, some $4770, as an "FHA [Federal Housing Authority] or VA application fee," the amount is clearly listed on the settlement statement (HUD-1 Form) as the VA funding fee. A loan origination fee was charged in addition to the funding fee. In response to the Army's rejection of this claim, Mr. Szerszynski, relying on Internal Revenue Service (IRS) Publication 25, asserts that this fee is not considered to be interest by the IRS, and therefore is not deductible as interest for purposes of personal income tax filings. Moreover, according to claimant, IRS Publication 523 categorizes the VA funding fee as a "mortgage insurance premium." As such, claimant argues that the funding fee should be reimbursable. Regardless of how another agency may categorize the VA funding fee for its purposes, it is the FTR and JTR which control eligibility for recovery here. Cf. Gerald Fediw, GSBCA 14256-RELO, 98-1 BCA  29,513, at 146,396 n.1 (1997) (lending institution's opinion that expenses were not part of finance charge not dispositive). The JTR adopts the standard enunciated in Flodin, which explains in considerable detail the rationale under which the VA funding fee is deemed to be nonreimbursable. The Board has addressed this issue on at least two prior occasions and applied this provision of the JTR to uphold an agency's denial of reimbursement of this funding fee. Rizal F. Golla, GSBCA 14535-RELO (June 19, 1998); Charles E. Piper, GSBCA 14299-RELO, 98-1 BCA  29,727. We find that the Army properly disallowed this expense item. The Maryland State Stamp Tax The Army's basis for denying reimbursement of the Maryland State Stamp Tax was that this tax, under applicable Maryland state law, is expressly waived for first-time Maryland home buyers such as claimant and his spouse. Instead, a reduced amount of tax is payable by the seller. This statutory provision is specifically recognized in the sales contract entered into between the seller and claimant, the buyer. The contract, moreover, states that the tax will be paid by the seller. Nonetheless, claimant argues that this tax should be reimbursed by the Army because on his settlement statement, the reduced tax was charged to the buyer, not the seller. Thus, claimant contends that the tax was not in fact waived. Although claimant is correct that the tax appears as a charge to the buyer on the settlement statement, this does not make this item reimbursable under the JTR. The FTR and JTR limit reimbursement of expenses of this nature to those that are "customarily paid by . . . the purchaser at the new official station, to the extent that they do not exceed specifically stated limitations." JTR C14002 A.4.a; accord 41 CFR 302-6.2(d)(1) (1997). Claimant has not shown, nor has he argued, that the seller's portion of this cost is customarily shifted to the buyer in his locality. The information available to us in the record suggests that this is not the case. The plain import of the Maryland statute is that this tax is not to be paid by the first-time buyer. This statutory language is expressly acknowledged in the contract of sale entered into between the seller and claimant. Regardless of whether this item was actually charged to claimant at closing, there is no basis under the JTR for the Army to reimburse this cost. In the absence of persuasive evidence showing that this cost is customarily paid by the buyer, the Army properly denied reimbursement of this expense. See Gerald Fediw, 98-1 BCA at 146,395. ___________________________ CATHERINE B. HYATT Board Judge