vehicle maintenance and repair services are commonly available. Most (but not all) sales by exchanges are free of state and local sales or VAT taxes as the sales take place on U.S. military reservations (exceptions include gasoline sales in the U.S. and sales by concessionaires licensed by the exchange). Unlike commissaries (military grocery stores), exchanges, for the most part, do not receive significant appropriations from the federal government and must operate on a for-profit basis. With the exception of military personnel assigned to duty with the exchange services, exchange service employees' salaries are paid from revenues generated from sales of merchandise, except for annual raises from funds appropriated by Congress. Exchanges are deemed Category C non-appropriated fund (NAF) activities, meaning they are designed to not only be self-sufficient, but generate a profit. Exchanges are normally located on military reservations and, as a result, do not pay rent or tax for the use of land. Exchanges' tax-exempt status (as instrumentalities of the U.S. Government) also reduces certain operating expenses. While exchanges must pay for the cost of transporting goods within the contiguous United States, Congress appropriates funds to subsidize the transportation costs of American merchandise to overseas exchange locations so that such items are available and affordable to personnel stationed overseas. Roughly 70% of the exchange earnings are paid to MWR programs. In the last ten years, more than $2.24 billion has been contributed by the exchange to the Army and Air Force to spend on quality of life improvements for Soldiers, Airmen and their families—Youth Services, Armed Forces Recreation Centers, arts and crafts, aquatic centers, post functions and golf courses. Exchanges play an important role for U.S. military and federal government personnel assigned overseas as they are often the only local source for American retail merchandise, such as clothing, electronics, books and magazines, fast food, etc. Exchanges also supply gasoline at prices roughly approximating those in the U.S., normally on a rationed basis, to overseas personnel for personal use, since fuel prices in most foreign countries (where U.S. military are stationed) are normally much higher due to local taxes. See also Army and Air Force Exchange Service Defense Commissary Agency Navy, Army and Air Force Institutes Navy Exchange Washington Navy Yard References External links Navy Exchange Service Army & Air Force Exchange Service Marine Corps Exchange Coast Guard Exchange Military terminology of the United States United States Department of Defense