Board of Contract Appeals
                 General Services Administration
                      Washington, D.C. 20405


                                             

                        February 23, 1998
                                             
                                        


                         GSBCA 14416-RELO


               In the Matter of MATTHEW D. FREEMAN


     Matthew D. Freeman, Eagle River, AK, Claimant.

     Ronald L. Page, Manager, External Relations Branch, Office of Financial Services,
Federal Aviation Administration, Washington, DC, appearing for Department of
Transportation.

DANIELS, Board Judge (Chairman).

     Within two years after the Federal Aviation Administration (FAA) transferred
employee Matthew D. Freeman from Seattle, Washington to Anchorage, Alaska, Mr.
Freeman sold his old residence in Seattle.  He asked the FAA to reimburse him for expenses
he incurred in selling the house, and the agency did so -- except for one particular item.  The
item is listed on Mr. Freeman's voucher as "excise tax."

     The term "excise tax" encompasses many meanings.  One leading authority defines
the term as:

     A tax imposed on the performance of an act, the engaging in an occupation, or
     the enjoyment of a privilege.  A tax on the manufacture, sale, or use of goods
     or on the carrying on of an occupation or activity, or a tax on the transfer of
     property.  In current usage the term has been extended to include various
     license fees and practically every internal revenue tax except the income tax.

Black's Law Dictionary 563 (6th ed. 1990).

     The FAA thought that the excise tax Mr. Freeman paid was a "property sales tax." 
Because the Federal Travel Regulation (FTR) makes property taxes nonreimbursable in
connection with residence transactions of relocated employees, 41 CFR 302-6.2(d)(2)(iii)
(1997), the agency decided that it could not repay the employee for this expense.  The FAA
did reimburse Mr. Freeman for some of the tax, however, by applying a holding of the
Comptroller General (who settled employee claims for relocation expenses until mid-1996). 
In John F. Manfredi, 65 Comp. Gen. 285 (1986), the Comptroller General opined that certain
excise taxes "may be reimbursed as part of the miscellaneous expenses allowance" which is
now established in the FTR at 41 CFR part 302-3.  The FAA repaid Mr. Freeman for his
excise tax, up to the limit prescribed for a miscellaneous expense allowance.
     The agency's action, while creative, was in two ways inconsistent with the FTR's
requirements.  First, if the excise tax involved in the sale of Mr. Freeman's Seattle residence
was truly a property tax, and therefore nonreimbursable, none of it should have been paid
through a miscellaneous expense allowance.  The regulation states clearly, "This allowance
shall not be used to reimburse the employee for . . . costs or expenses that the employee
incurred but which are disallowed elsewhere in this subtitle."  41 CFR 302-3.1(c).  The
excise tax involved in the Manfredi case was imposed on the value of
tangible property transported into the State of Washington for
use there.  This tax, which was imposed on the claimant's boat
and trailer, was not disallowed elsewhere in the FTR. 
Instead, it was likened by the Comptroller General to one of
the types of costs specifically covered by the miscellaneous
expense allowance -- "[c]osts of automobile registration,
driver's license, and use taxes imposed when bringing
automobiles into certain jurisdictions."  41 CFR
302-3.1(b)(5).

     The second way in which the agency erred with regard to
Mr. Freeman's claim was considering the sum the employee paid
to be a "property tax" in the normal sense in which the FTR
uses that term -- a tax imposed on the ownership of property. 
See Black's Law Dictionary 1218.  The tax this employee paid
was imposed by Washington State "upon each sale of real
property" within the state.  Wash. Rev. Code   82,45.060
(1993) (emphasis added). (The tax may have included an amount
or amounts payable to the county and/or city in which the
property was located, as well.  See Wash. Rev. Code  
82.46.010.)  This sort of excise tax, on the transfer of
property, is of a completely different nature from the variety
of excise tax involved in Manfredi.  The FTR makes "[m]ortgage
and transfer taxes" reimbursable when paid in connection with
a relocating employee's residence transaction.  41 CFR 302-
6.2(d)(1)(iv).

     An expense such as this transfer tax is reimbursable only
if it is "customarily paid by the seller of a residence in the
locality of the old official station or by the purchaser of a
residence at the new official station, to the extent [it does]
not exceed specifically stated limitations, or in the absence
thereof, amounts customarily paid in the locality of the
residence."  41 CFR 302-6.2(d)(1).  Washington State law not
only establishes the amount of the tax, but also makes payment
of the tax an obligation of the seller.  Wash. Rev. Code  
82.45.080.  Mr. Freeman, as the seller of the residence in
question, complied with this law.  The FAA should now
reimburse him in full for the tax he paid.





                              _________________________ 
                              STEPHEN M. DANIELS 
                              Board Judge