and use taxes per federal statute. Additionally, many states (all except Arizona) exempt their state governments by state statute. Not all states require a certificate for government exemption. Estimates show that approximately $19 trillion gross sales are associated to federal and state governments, which ties to actual reported on GDP reporting. Exempt Organizations - Exempt organizations are generally defined as they are in Internal Revenue Code §501(c). Additionally, many states require the Internal Revenue Code letter establishing the organization as exempt as a supplement to the exemption certificate. Estimates show that approximately $1.5 billion of gross sales are associated to exempt organizations. Construction Contracting - Construction and/or Capital Improvements may also be exempt per state statute or regulation. There may be different treatment for new construction and capital improvements. Construction contractors may be exempt from paying sales tax upon purchasing but will be required to pay use tax upon incorporation into real property. Construction accounts for $520.3 billion of GDP. Aircraft - Aircraft, aircraft parts, and aircraft labor are generally exempt because aircraft are used in multiple states. Air services accounts for $63.3 billion of GDP. Exemptions are also offered upon the usage of the property. For instance, the most common types of exemptions are for resellers, who purchase the goods to resell them so they are not the end consumer. Manufacturers are also exempt when they purchase goods that ultimately are incorporated into tangible personal property that is destined for the open market. Again, the manufacturer is not the ultimate consumer of the good. Several states also offer Direct Pay Permits, which are issued to manufacturers allowing them to purchase the goods intended for incorporation into tangible personal property. Such manufacturers may also use the same goods or parts for repair and maintenance of their existing products previously purchased by the end consumer. Thus, the burden of tax liability shifts from the seller of the goods to the manufacturer. The manufacturer will purchase all goods tax exempt with the Direct Pay Permit but is required to accrue and remit tax on goods that are taken from inventory (intended for incorporation into tangible personal property held for sale) and consumed by the manufacturer. That is done because the manufacturer has better visibility to the usage of its property and so is in a better position to determine if use tax should apply. Direct pay permits Direct pay permits are generally