(1) Lodging rentals or sales to the United States government and all departments and institutions thereof, the State and the departments, institutions and political subdivision thereof, and the Town; but only in the exercise of their governmental functions and only when rentals and purchases are supported by official government purchase orders or other official documentation, and paid for by draft or warrant drawn on the government’s account directly to the vendor.

(2) Lodging rentals or sales to charitable organizations duly established and recognized under state or federal law, but only to the extent any such rental or sale is transacted in the conduct of the organization’s regular charitable functions and activities and is paid for directly by the organization without reimbursement therefor.

(3) All rentals or sales which the Town is prohibited from taxing under the Constitution or laws of the United States or the State.