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US mortgage subservicing

US mortgage subservicing

If a US mortgage bank outsources their loans to a third party subservicing provider, is the hand on of the loans liable to value added tax?

There is no Value Added Tax in the US. It has been discussed by political candidates as a possible substitute for the graduated income tax, but has never been implemented. Significant opposition to it has been voiced on a number of grounds. Some find it regressive. Others, for instance, the National Governors' Association, feel that it would damage state revenues. National Governors' Association http://www.nga.org/nga/legislativeUpdate/1,1169,C_POLICY_POSITION%5ED_486,00.html "9.2 National Sales or Value-Added Tax The nation's Governors oppose a national sales or transactional value-added tax. Such taxes would intrude into a tax area that has traditionally been reserved for and relied on by state and local governments. If enacted, either of these taxes would seriously threaten the ability of state and local governments to maintain their tax base." Securities issued by the federally chartered Federal National Mortgage Association and Federal Home Loan Mortgage Corporation are tax exempt (state and federal). FEDERAL REGULATIONS Section 2605.Servicing mortgage loans and adminstration of escrow accounts http://caselaw.lp.findlaw.com/casecode/uscodes/12/chapters/27/sections/section_2605.html A Primer on the Secondary Mortgage Market http://www.cityresearch.com/pres/smm.pdf SEARCH TERMS ://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=value+added+tax+Congress ://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=secondary+mortgage+market+tax ://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=mortgage+servicing+tax hlabadie-ga