A-51249, OCTOBER 4, 1933, 13 COMP. GEN. 91

A-51249: Oct 4, 1933

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TAXES - STATE - SALES THERE IS NO AUTHORITY FOR A STATE TO IMPOSE A SALES TAX ON PURCHASES BY THE UNITED STATES AND THERE IS NO APPROPRIATION AVAILABLE FOR THE PAYMENT OF SUCH SALES TAXES. ARE COMPELLED TO MAKE AT FIELD HEADQUARTERS AND AT OTHER FIELD POINTS NUMEROUS PURCHASES OF SUPPLIES AND MATERIALS. FIND THAT IN A NUMBER OF STATES THE TRANSACTIONS ARE SUBJECT UNDER STATE LAWS TO A RETAIL SALES TAX. ILLINOIS ARE KNOWN TO HAVE PASSED RETAIL SALES-TAX ACTS. FIELD REPRESENTATIVES ARE ASKING FOR DIRECTIONS AS TO THE PROPER METHOD OF CARING FOR THE CONDITIONS WHEN THE AMOUNT OF TAX IS DEMANDED BY THE RETAILER. THE SUGGESTION HAS BEEN MADE TO THE FIELD MEN OF THE GEOLOGICAL SURVEY THAT IF IT IS FOUND NECESSARY TO PAY THE TAX.

A-51249, OCTOBER 4, 1933, 13 COMP. GEN. 91

TAXES - STATE - SALES THERE IS NO AUTHORITY FOR A STATE TO IMPOSE A SALES TAX ON PURCHASES BY THE UNITED STATES AND THERE IS NO APPROPRIATION AVAILABLE FOR THE PAYMENT OF SUCH SALES TAXES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, OCTOBER 4, 1933:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 26, 1933, AS FOLLOWS:

FIELD OFFICES OF THE GEOLOGICAL SURVEY, AND PRESUMABLY THOSE OF OTHER ACTIVITIES OF THE DEPARTMENT OF THE INTERIOR, ARE COMPELLED TO MAKE AT FIELD HEADQUARTERS AND AT OTHER FIELD POINTS NUMEROUS PURCHASES OF SUPPLIES AND MATERIALS, AND FIND THAT IN A NUMBER OF STATES THE TRANSACTIONS ARE SUBJECT UNDER STATE LAWS TO A RETAIL SALES TAX.

THUS FAR THE STATES OF MISSISSIPPI, CALIFORNIA, AND ILLINOIS ARE KNOWN TO HAVE PASSED RETAIL SALES-TAX ACTS, AND FIELD REPRESENTATIVES ARE ASKING FOR DIRECTIONS AS TO THE PROPER METHOD OF CARING FOR THE CONDITIONS WHEN THE AMOUNT OF TAX IS DEMANDED BY THE RETAILER.

HAVING IN MIND YOUR DECISION A-43308 OF AUGUST 24, 1932, WITH REFERENCE TO THE SALES TAX IN THE STATE OF MISSISSIPPI, THE SUGGESTION HAS BEEN MADE TO THE FIELD MEN OF THE GEOLOGICAL SURVEY THAT IF IT IS FOUND NECESSARY TO PAY THE TAX, A SEPARATE RECEIPT COVERING THE AMOUNT OF THE TAX AND IDENTIFYING THE PURCHASE SHALL BE OBTAINED AND SHALL ACCOMPANY THE ACCOUNT WITH A VIEW OF OBTAINING REFUND.

THERE IS FORWARDED A COPY OF SENATE BILL NO. 1211 OF THE STATE OF CALIFORNIA, BEING THE ONLY COPY AVAILABLE AT THIS TIME AND WHICH YOU ARE ASKED TO RETURN WITH YOUR DECISION, ATTENTION BEING CALLED TO SECTION 5 (A), PAGE 2, WHEREIN THERE APPEARS AN INTIMATION THAT THE ACT DOES NOT CONTEMPLATE COLLECTION OF THE RETAIL SALES TAX FROM REPRESENTATIVES OF THE STATE OR FEDERAL ACTIVITIES.

I ASK THAT YOU OUTLINE A GENERAL POLICY TO INSURE UNIFORMITY IN THE MANNER OF HANDLING THESE TRANSACTIONS.

IF SENATE BILL NO. 1211, WHICH YOU ENCLOSED WITH YOUR LETTER, WAS ENACTED INTO LAW BY THE LEGISLATURE OF THE STATE OF CALIFORNIA, THE RETAIL SALES TAX THEREIN PROVIDED IS LEVIED ON THE CONSUMER AND IT IS MADE THE DUTY OF THE RETAILER TO COLLECT THE TAX FROM THE CONSUMER "SO FAR AS THE SAME CAN BE DONE" AND TO REMIT THE TAX TO THE STATE OF CALIFORNIA AUTHORITIES. YOU HAVE INDICATED, SECTION 5 OF THIS ACT SPECIFICALLY EXEMPTED FROM ITS PROVISIONS AND FROM THE COMPUTATION OF AMOUNT OF TAX LEVIED, ASSESSED, OR PAYABLE THE GROSS RECEIPTS FROM SALES OF TANGIBLE PERSONAL PROPERTY WHICH THE STATE OF CALIFORNIA WAS PROHIBITED FROM TAXING UNDER THE CONSTITUTION OR LAWS OF THE UNITED STATES OR UNDER THE CONSTITUTION OF SAID STATE. IS TOO CLEAR FOR SERIOUS ARGUMENT THAT THE STATE OF CALIFORNIA, AS WELL AS ANY OTHER STATE, IS WITHOUT AUTHORITY TO TAX THE UNITED STATES ON SUCH PURCHASES AS MAY BE NECESSARY FOR THE CONDUCT OF THE BUSINESS OF THE FEDERAL GOVERNMENT. SEE PANHANDLE OIL COMPANY V. MISSISSIPPI, 277 U.S. 218, AND GRAYSBURG OIL CO. V. TEXAS, 278 U.S. 582, REVERSING 3 S.W./2D) 427. THIS APPEARS TO HAVE BEEN RECOGNIZED IN THE AFORESAID SECTION 5 OF THE ACT, AND FIELD OFFICERS OR OTHER CONTRACTING OFFICERS OF THE INTERIOR DEPARTMENT MAKING PURCHASES IN THE STATE OF CALIFORNIA, OR IN OTHER STATES HAVING SALES TAXES, SHOULD BE INSTRUCTED NOT TO PAY THE AMOUNT OF THE SALES TAX ON SUCH ARTICLES AS MAY BE PURCHASED, FOR THE REASON (1) THAT THERE IS NO AUTHORITY IN ANY STATE TO TAX THE UNITED STATES ON ITS PURCHASES AND (2) THAT THERE IS NO APPROPRIATION WHICH MAY BE USED TO PAY SUCH TAXES TO THE STATES.

IN VIEW OF THE CONSTITUTIONAL INHIBITION AGAINST STATE TAXING THE UNITED STATES OR ITS INSTRUMENTALITIES EITHER DIRECTLY OR INDIRECTLY, IT WOULD SEEM THAT SUCH OF THE STATES AS HAVE SALES TAXES SHOULD ISSUE INSTRUCTION TO RETAILERS AS TO THE PROCEDURE WHICH THEY SHOULD FOLLOW IN CLAIMING EXEMPTION FROM THE SALES TAX ON ARTICLES SOLD TO THE UNITED STATES, AND IT MAY BE STATED THAT, GENERALLY, THIS PROCEDURE HAS BEEN FOLLOWED IN THE MATTER OF STATE TAXES ON GASOLINE PURCHASED FOR THE USE OF THE UNITED STATES.

THERE MAY ARISE A FEW SITUATIONS WHERE IMPELLING NECESSITY REQUIRES FIELD OFFICERS TO MAKE PURCHASES FROM RETAILERS WHO WILL NOT AGREE TO MAKE DELIVERY WITHOUT PAYMENT OF THE AMOUNT OF THE SALES TAX. IN SUCH CASES FIELD OFFICERS SHOULD BE INSTRUCTED TO TAKE RECEIPTS FROM THE RETAILERS SHOWING THE PURCHASE MADE AND THE PAYMENT THEREFOR, WITH A SEPARATE ITEMIZATION OF THE AMOUNT OF THE TAX. DEMAND SHOULD THEREUPON BE PROMPTLY MADE ON THE PROPER STATE AUTHORITIES FOR A REFUND OF THE TAX. IN GENERAL, CLAIMS FOR THESE TAXES SHOULD BE HANDLED IN THE SAME MANNER, SO FAR AS THE FEDERAL GOVERNMENT IS CONCERNED, AS THAT ESTABLISHED FOR HANDLING CLAIMS FOR REFUND OF GASOLINE TAXES WHICH ARE A FORM OF SALES TAX.