Which of the following is not a form of Budget Authority?

Which of the following is not a form of Budget Authority?

• A. Tax Credit
• B. Appropriation
• C. Contract Authority
• D. Imprest Authority

Answer: (A)

Budget authority is the legal permission for the government to incur obligations and make payments. Appropriations are a classic form of that authority, giving agencies funds to spend. Contract authority is another form that allows the government to incur obligations and make payments without a separate annual appropriation for each item. Imprest authority provides cash to disburse funds from a central fund. Tax credits do not grant spending authority; they are provisions that reduce a taxpayer’s liability and are treated as revenue effects, not as authority for the government to incur obligations. So the item that is not a form of budget authority is the tax credit.

Budget authority is the legal permission for the government to incur obligations and make payments. Appropriations are a classic form of that authority, giving agencies funds to spend. Contract authority is another form that allows the government to incur obligations and make payments without a separate annual appropriation for each item. Imprest authority provides cash to disburse funds from a central fund. Tax credits do not grant spending authority; they are provisions that reduce a taxpayer’s liability and are treated as revenue effects, not as authority for the government to incur obligations. So the item that is not a form of budget authority is the tax credit.