B-43591, AUGUST 23, 1944, 24 COMP. GEN. 150

B-43591, AUGUST 23, 1944, 24 COMP. GEN. 150

TAXES - STATE - GASOLINE - PURCHASES IN FLORIDA, MARYLAND, MISSISSIPPI, TENNESSEE, UTAH, AND WYOMING THE POST OFFICE DEPARTMENT MAY DISCONTINUE THE PROCEDURE OF OBTAINING TAX EXEMPTION CERTIFICATES FROM VENDORS FURNISHING SERVICE STATION DELIVERIES OF GASOLINE IN THE STATES OF FLORIDA, MARYLAND, MISSISSIPPI, TENNESSEE, UTAH, AND WYOMING UNDER CONTRACTS PROVIDING FOR THE PROCUREMENT OF GASOLINE ON A TAX-INCLUSIVE BASIS--- THE LEGAL INCIDENCE OF THE GASOLINE TAX IN SUCH STATES BEING ON THE VENDOR RATHER THAN THE VENDEE--- AND THE PROVISIONS OF PARAGRAPH 8 OF GENERAL REGULATIONS NO. 86--- REVISED, 16 COMP. GEN. 1130, RELATING TO SUCH PROCEDURE, NO LONGER NEED BE REGARDED AS FOR APPLICATION IN THE CASE OF SUCH SALES.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, AUGUST 23, 1944:

I HAVE YOUR LETTER OF JULY 29, 1944, AS FOLLOWS:

UNDER DATE OF MARCH 6, 1942, (A-23419, B-8790, 21 COMP. GEN. 843), IN A LETTER ADDRESSED TO THIS DEPARTMENT RELATING TO THE TAX IMPOSED BY THE STATE OF NORTH DAKOTA ON THE SALE OF GASOLINE, YOU ADVISED AS FOLLOWS:

"CONSEQUENTLY, IN VIEW OF THE FOREGOING, I HAVE TO ADVISE THAT THIS OFFICE WILL DISCONTINUE THE PROCEDURE HERETOFORE FOLLOWED OF SEEKING REIMBURSEMENT FROM THE STATE OF NORTH DAKOTA FOR THE AMOUNT OF SO CALLED TAX EXEMPTION CERTIFICATES ( STANDARD FORM NO. 1094) PURPORTING TO REPRESENT THE AMOUNT OF THE NORTH DAKOTA TAX HERE INVOLVED WHICH WAS INCLUDED IN THE PURCHASE PRICE OF GASOLINE PROCURED IN THAT STATE BY OR FOR THE USE OF THE FEDERAL GOVERNMENT, AND THAT IT IS NO LONGER NECESSARY FOR YOUR DEPARTMENT, OR ANY OTHER AGENCY OF THE UNITED STATES, TO OBTAIN THE SO-CALLED TAX EXEMPTION CERTIFICATES, OR STATEMENTS SHOWING PAYMENTS INCLUSIVE OF THE TAX, IN CONNECTION WITH PAYMENTS MADE TO COVER THE PURCHASE PRICE OF GASOLINE REQUIRED TO BE PROCURED--- EITHER THROUGH COMPETITIVE BIDDING OR IN THE OPEN MARKET-- IN NORTH DAKOTA, EVEN THOUGH THERE BE SHOWN THE TAX IMPOSED UPON THE VENDOR BY THE ABOVE-MENTIONED TAXING STATUTE OF THAT STATE, IN ADDITION TO THE PRICE AS OTHERWISE FIXED BY THE VENDOR.'

IN THE LIGHT OF THE ABOVE DECISION, AND IN VIEW OF YOUR LETTERS OF JUNE 15, 1944, (B-42427) AND JUNE 16, 1944, (B-42338, 23 COMP. GEN. 957) ADVISING THAT, IN YOUR OPINION, THE INCIDENCE OF THE SALES TAX ON GASOLINE IN THE STATES OF MISSISSIPPI AND MARYLAND, RESPECTIVELY, WAS ON THE VENDOR IN EACH CASE, THUS PRECLUDING THE POSSIBILITY OF THE FEDERAL GOVERNMENT SECURING REIMBURSEMENT OF THE TAXES PAID IN THOSE INSTANCES WHERE THE CONTRACTS PROVIDE FOR THE PURCHASE OF GASOLINE ON A ,TAX INCLUDED" BASIS, PLEASE ADVISE WHETHER THE POST OFFICE DEPARTMENT MAY PROPERLY DISCONTINUE THE USE OF TAX EXEMPTION CERTIFICATES IN THE STATES OF MISSISSIPPI AND MARYLAND, AS IN THE CASE OF NORTH DAKOTA.

ALSO, IT WILL BE APPRECIATED IF YOU WILL ADVISE WHETHER ANY DECISION HAS BEEN MADE IN CONNECTION WITH SIMILAR PURCHASES OF GASOLINE IN THE STATE OF FLORIDA, WHERE OUR LOCAL FILLING STATION CONTRACTS ARE NOW MADE ON A "TAX INCLUDED" BASIS. THERE IS ATTACHED HERETO FOR YOUR INFORMATION A COPY OF AN OPINION OF THE ATTORNEY GENERAL OF THE STATE OF FLORIDA, TRANSMITTED WITH A CIRCULAR LETTER DATED FEBRUARY 11, 1943, OF MR. J. M. LEE, COMPTROLLER, STATE OF FLORIDA.

IT WOULD APPEAR THAT, IN VIEW OF THE MODIFICATION OF THE FEDERAL TAX LAW, REVENUE ACT OF 1943, WHEREIN PURCHASES MADE OF CERTAIN COMMODITIES BY FEDERAL AGENCIES, ARE NO LONGER EXEMPT FROM PAYMENT OF THE FEDERAL EXCISE TAX, THE USE OF TAX EXEMPTION CERTIFICATES, FORMS 1094, 1094-A, 1094-B AND 1094-C, MAY BE DISCONTINUED ENTIRELY IN CONNECTION WITH THE PURCHASE OF GASOLINE IN THOSE STATES WHICH HAVE IMPOSED THE STATE TAX ON THE VENDOR AND WHERE WE ARE NOW CONTRACTING FOR GASOLINE ON A "TAX INCLUDED" BASIS. THESE STATES INCLUDE FLORIDA, IDAHO, MARYLAND, MISSISSIPPI, NORTH DAKOTA, TENNESSEE, UTAH AND WYOMING. NONE OF THESE STATES WILL ACCEPT THE EXEMPTION CERTIFICATES. PLEASE ADVISE WHETHER IT IS NECESSARY THAT WE CONTINUE TO HAVE THEM EXECUTED BY POSTMASTERS IN THESE STATES, SIGNED BY THE DEALERS AND FORWARDED TO THE DEPARTMENT IN COMPLIANCE WITH PARAGRAPH 8 OF GENERAL REGULATIONS NO. 86--- REVISED, DATED JUNE 11, 1937.

IT IS UNDERSTOOD THAT THE INSTANT SUBMISSION RELATES TO ONLY SUCH TRANSACTIONS AS INVOLVE THE PROCUREMENT OF SERVICE STATION DELIVERIES OF GASOLINE FOR OFFICIAL USE UNDER CONTRACTS PROVIDING FOR THE FURNISHING OF GASOLINE ON A TAX-INCLUSIVE BASIS AND THAT YOU ENTERTAIN THE VIEW THAT THE TAXING AUTHORITIES OF THE EIGHT STATES TO WHICH YOU REFER NO LONGER ARE WILLING TO ACCEPT U.S. GOVERNMENT TAX EXEMPTION CERTIFICATES ( STANDARD FORM NO. 1094) IN LIEU OF THE PAYMENT OF THE STATE TAX ON SUCH SALES.

HOWEVER, WHILE IT APPEARS FROM THE DATA FURNISHED TO THIS OFFICE BY YOUR DEPARTMENT AND OTHER AGENCIES OF THE GOVERNMENT THAT THE PROCEDURE NOW FOLLOWED BY THE TAXING AUTHORITIES OF FLORIDA, MARYLAND, MISSISSIPPI, NORTH DAKOTA, TENNESSEE, UTAH AND WYOMING DOES NOT SANCTION THE USE OF SUCH CERTIFICATES IN CONNECTION WITH SALES OF THE TYPE HERE INVOLVED, IT DOES NOT APPEAR THAT THE TAXING AUTHORITIES OF IDAHO REQUIRE THE PAYMENT BY A VENDOR OF THE STATE TAX ON SALES OF GASOLINE TO THE UNITED STATES. THEREFORE, YOU ARE ADVISED THAT EVERY EFFORT SHOULD BE MADE TO PROCURE SUCH GASOLINE AS IS REQUIRED TO BE PURCHASED IN THAT STATE FOR OFFICIAL USE AT A PRICE WHICH IS IN FACT EXCLUSIVE OF THE IDAHO GASOLINE TAX AND THAT, IF IT IS IMPOSSIBLE TO PROCURE GASOLINE IN IDAHO ON THAT BASIS, A PROPERLY EXECUTED TAX EXEMPTION CERTIFICATE SHOULD BE OBTAINED FROM THE CONTRACTOR TO COVER EACH PURCHASE UPON WHICH A CHARGE IS MADE ON ACCOUNT OF THE STATE TAX.

AS WAS POINTED OUT IN THE DECISIONS OF THIS OFFICE MENTIONED BY YOU, THE LANGUAGE USED BY THE SUPREME COURT OF THE UNITED STATES IN ITS DECISION IN THE CASE OF ALABAMA V. KING AND BOOZER, 314 U.S. 1, LEAVES NO ROOM FOR DOUBT THAT A PERSON WHO SELLS SUPPLIES TO THE UNITED STATES IS NOT--- MERELY BECAUSE OF THE IMMUNITY OF THE FEDERAL GOVERNMENT FROM STATE TAXATION--- EXEMPT FROM THE PAYMENT OF AN OTHERWISE APPLICABLE STATE TAX WHERE IT APPEARS THAT THE LEGAL INCIDENCE OF THE TAX RESTS UPON HIM AS THE VENDOR AND NOT UPON THE UNITED STATES AS THE VENDEE. HENCE, PAYMENT PROPERLY MAY BE REQUIRED BY A STATE FROM A VENDOR OF A TAX OF THAT TYPE IN THE CASE OF SUCH SALES TO THE UNITED STATES AS ARE CONSUMMATED WITHIN THE TERRITORIAL JURISDICTION OF THE STATE UNLESS THE STATE LAW OR THE REGULATIONS PROMULGATED BY THE STATE TAXING AUTHORITIES WITH RESPECT THERETO EXCEPT THE TRANSACTIONS FROM THE OPERATION OF THE TAXING STATUTE INVOLVED.

AN EXAMINATION OF THE GASOLINE TAXING LAWS OF THE STATES OF FLORIDA, MARYLAND, MISSISSIPPI, TENNESSEE, UTAH AND WYOMING DISCLOSES NO MATERIAL DIFFERENCES BETWEEN THE PROVISIONS OF THOSE LAWS, SO FAR AS THEIR APPLICABILITY TO SALES OF GASOLINE TO THE UNITED STATES IS CONCERNED, AND THOSE OF THE TAXING STATUTE OF NORTH DAKOTA, WHICH WERE CONSIDERED IN MY DECISION OF MARCH 6, 1942, TO YOU, 21 COMP. GEN. 843. IN OTHER WORDS, THE LEGAL INCIDENCE OF THE TAX PRESCRIBED BY EACH OF THOSE STATUTES IS UPON THE VENDOR RATHER THAN UPON THE VENDEE; AND, WHILE THIS OFFICE IS INFORMED THAT THE LEGISLATURES AND TAXING AUTHORITIES OF CERTAIN OF THOSE STATES HAVE SPECIFICALLY EXEMPTED CERTAIN TYPES OF SALES TO THE UNITED STATES FROM THE OPERATION OF SUCH LAWS, IT DOES NOT APPEAR THAT THE EXEMPTIONS THUS PROVIDED EXTEND TO SERVICE STATION DELIVERIES OF THE TYPE HERE INVOLVED. SUCH BEING THE CASE, AND SINCE IT IS CLEAR THAT A TAX WHICH RESTS UPON A VENDOR CANNOT PROPERLY BE REGARDED AS BEING PASSED ON, AS SUCH, TO A VENDEE BECAUSE THE PURCHASE PRICE OF THE GASOLINE INVOLVED IN A PARTICULAR CASE INCLUDES AN AMOUNT REPRESENTING A CHARGE ON ACCOUNT OF THE TAX, IT MUST BE CONCLUDED THAT THERE IS NO REASONABLE BASIS ON WHICH THE UNITED STATES MAY SEEK A REFUND FROM ANY OF THOSE STATES OF THE CHARGE IT IS REQUIRED TO PAY ON ACCOUNT OF THE APPLICABLE TAX IN THE CASE OF SERVICE STATION DELIVERIES OF GASOLINE IN SAID STATES AND THAT NO USEFUL PURPOSE WOULD BE SERVED BY REQUIRING VENDORS TO EXECUTE TAX EXEMPTION CERTIFICATES COVERING SUCH CHARGES.

CONSEQUENTLY, I HAVE TO ADVISE THAT YOU MAY DISCONTINUE THE PROCEDURE OF OBTAINING TAX EXEMPTION CERTIFICATES FROM VENDORS FURNISHING SERVICE STATION DELIVERIES IN THE STATES OF FLORIDA, MARYLAND, MISSISSIPPI, TENNESSEE, UTAH AND WYOMING UNDER CONTRACT PROVIDING FOR THE PROCUREMENT OF GASOLINE ON A TAX-INCLUSIVE BASIS--- IT BEING ASSUMED THAT YOU PREVIOUSLY HAVE DISCONTINUED THE PROCEDURE IN RESPECT TO TRANSACTIONS OF THAT TYPE IN THE STATE OF NORTH DAKOTA--- AND THAT THE PROVISIONS OF PARAGRAPH 8 OF GENERAL REGULATIONS NO. 86--- REVISED, DATED JUNE 11, 1937, 16 COMP. GEN. 1130, NO LONGER NEED BE REGARDED AS FOR APPLICATION IN THE CASE OF SUCH SALES.