A-39981, DECEMBER 28, 1931, 11 COMP. GEN. 254

A-39981: Dec 28, 1931

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THERE IS NO AUTHORITY TO ASSESS AND COLLECT IMPORT DUTIES PROVIDED FOR BY THE LAWS OF PORTO RICO UPON COFFEE IMPORTED BY THE GOVERNMENT INTO THAT TERRITORY FOR THE USE OF THE ARMY. A DECISION IS REQUESTED AS TO WHETHER THE INSULAR TARIFF DUTY OF 15 CENTS PER POUND ON COFFEE. THE QUESTION IS WHETHER THE ARMY FINANCE DEPARTMENT SHOULD PAY THE SAID INSULAR TARIFF FROM CURRENT ARMY APPROPRIATIONS ON EACH SHIPMENT OF ARMY COFFEE ARRIVING IN PORTO RICO. WAS THAT THE PHILIPPINE GOVERNMENT. THERE WAS NO AUTHORITY FOR THE PHILIPPINE GOVERNMENT TO IMPOSE A CUSTOMS DUTY. WHICH IS A TAX. THE PAYMENT OF SUCH DUTIES IS PROVIDED FOR. THE LEGALITY OF THE CHARGES FOR CUSTOMS DUTIES IN PORTO RICO IS SUSTAINED.

A-39981, DECEMBER 28, 1931, 11 COMP. GEN. 254

PORTO RICO - IMPORT DUTIES UNLESS EXPRESSLY DIRECTED BY LAW, OR UNLESS SPECIFICALLY PASSED UPON BY THE SUPREME COURT OF THE UNITED STATES AS TO THE LEGALITY THEREOF, THERE IS NO AUTHORITY TO ASSESS AND COLLECT IMPORT DUTIES PROVIDED FOR BY THE LAWS OF PORTO RICO UPON COFFEE IMPORTED BY THE GOVERNMENT INTO THAT TERRITORY FOR THE USE OF THE ARMY.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, DECEMBER 28, 1931:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 10, 1931, AS FOLLOWS:

UNDER THE PROVISIONS OF SECTION 74, TITLE 31, U.S.C. A DECISION IS REQUESTED AS TO WHETHER THE INSULAR TARIFF DUTY OF 15 CENTS PER POUND ON COFFEE, IMPOSED BY THE ACT OF THE PORTO RICAN LEGISLATURE APPROVED MAY 5, 1931, PURSUANT TO SECTION 319 OF THE ACT OF CONGRESS APPROVED JUNE 17, 1930 (46 STAT. 696), APPLIES TO COFFEE BELONGING TO THE UNITED STATES GOVERNMENT SENT FROM THE CONTINENTAL UNITED STATES INTO PORTO RICO SINCE MAY 5, 1931, BY THE QUARTERMASTER GENERAL, FOR THE USE OF THE ARMY OF THE UNITED STATES.

IN OTHER WORDS, THE QUESTION IS WHETHER THE ARMY FINANCE DEPARTMENT SHOULD PAY THE SAID INSULAR TARIFF FROM CURRENT ARMY APPROPRIATIONS ON EACH SHIPMENT OF ARMY COFFEE ARRIVING IN PORTO RICO, UPON VOUCHERS, OTHERWISE CORRECT, PRESENTED BY THE CUSTOMS SERVICE AT SAN JUAN.

UNDER DATE OF NOVEMBER 2, 1929, THIS OFFICE, BY DECISION 9 COMP. GEN. 180, HELD, IN SUBSTANCE, THAT THE PAST PRACTICE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT IN ALLOWING CLAIMS FOR CUSTOMS DUTIES IMPOSED BY THE PHILIPPINE GOVERNMENT ON GOODS OR MERCHANDISE IMPORTED INTO THE PHILIPPINE ISLANDS BY THE UNITED STATES GOVERNMENT FOR THE USE OF ANY OF ITS INSTRUMENTALITIES SHOULD BE DISCONTINUED PENDING DECISION BY THE SUPREME COURT OF THE UNITED STATES AS TO THE LEGALITY OF SUCH CHARGES OR FURTHER LEGISLATION WITH RESPECT THERETO.

THE BASIS OF THE HOLDING IN THE DECISION, SUPRA, WAS THAT THE PHILIPPINE GOVERNMENT, BEING A DERIVATIVE GOVERNMENT OF THE SOVEREIGN GOVERNMENT OF THE UNITED STATES AND IT BEING FUNDAMENTAL THAT A DERIVATIVE GOVERNMENT MAY NOT TAX ITS SOVEREIGN, THERE WAS NO AUTHORITY FOR THE PHILIPPINE GOVERNMENT TO IMPOSE A CUSTOMS DUTY, WHICH IS A TAX, ON PROPERTY OF THE UNITED STATES GOVERNMENT.

THE SAME PRINCIPLE APPEARS TO APPLY IN THE CASE OF PORTO RICO AND THE STATUTE ENACTED MAY 5, 1931, BY THE PORTO RICAN LEGISLATURE, IMPOSING AN IMPORT DUTY OF 15 CENTS A POUND ON COFFEE, CAN NOT BE CONSIDERED AS APPLYING TO COFFEE IMPORTED BY THE UNITED STATES GOVERNMENT INTO PORTO RICO FOR THE USE OF THE UNITED STATES GOVERNMENT OR ITS INSTRUMENTALITIES, PAYABLE UNDER APPROPRIATIONS MADE BY THE FEDERAL GOVERNMENT FOR THE GOVERNMENTAL ACTIVITIES INVOLVED UNLESS, BY SPECIFIC LEGISLATION NOT INCONSISTENT WITH THE PROVISIONS IN THE CONSTITUTION OF THE UNITED STATES, THE PAYMENT OF SUCH DUTIES IS PROVIDED FOR, OR UNLESS, BY DECISION OF THE SUPREME COURT OF THE UNITED STATES, THE LEGALITY OF THE CHARGES FOR CUSTOMS DUTIES IN PORTO RICO IS SUSTAINED.

THERE HAS BEEN NOTED THE STATEMENT OF ASSISTANT SECRETARY OF THE TREASURY LOWMAN, IN LETTER TO YOU OF OCTOBER 13, 1931, TO THE EFFECT THAT THE STATUS OF THE COFFEE DUTY IMPOSED IN PORTO RICO DIFFERS MATERIALLY FROM THE DUTIES COLLECTED ON IMPORTATIONS INTO THE PHILIPPINE ISLANDS, PARTICULARLY IN THAT SUCH COFFEE DUTY IS ASSESSED AND COLLECTED IN PORTO RICO BY THE SOVEREIGN AUTHORITY THROUGH THE ADMINISTRATIVE OFFICERS OF THE TREASURY DEPARTMENT.

IT IS NOT BELIEVED THE CIRCUMSTANCE REFERRED TO CAN BE GIVEN THE EFFECT SUGGESTED BY THE TREASURY DEPARTMENT. WHILE IT MAY BE TRUE THAT IN PORTO RICO THE IMPORT DUTY ON COFFEE IS ASSESSED AND COLLECTED BY THE ADMINISTRATIVE OFFICERS OF THE TREASURY DEPARTMENT, THE IMPOSITION OF THE DUTY SO ASSESSED AND COLLECTED IS BY VIRTUE OF A LAW OF THE GOVERNMENT OF PORTO RICO AND, FURTHERMORE, THE IMPORT DUTIES SO COLLECTED ARE NOT DEPOSITED IN THE TREASURY FOR THE BENEFIT OF THE SOVEREIGN BUT FOR THAT OF THE DERIVATIVE GOVERNMENT UNDER THE PROVISIONS OF SECTION 4 OF THE ACT OF APRIL 12, 1900, 31 STAT. 78, SO THAT, IN THE FINAL ANALYSIS, THERE IS PRESENTED THE SAME QUESTION AS IN THE CASE OF THE PHILIPPINE ISLANDS EXCEPT THAT THE MEANS OF ASSESSING AND COLLECTING THE DUTIES MAY DIFFER.

IN SPECIFIC ANSWER TO THE QUESTION SUBMITTED BY YOU, I HAVE TO ADVISE THERE IS NO AUTHORITY FOR THE PAYMENT OF IMPORT DUTIES UPON COFFEE IMPORTED INTO PORTO RICO FOR THE USE OF THE ARMY OF THE UNITED STATES.