A-80343, SEPTEMBER 22, 1936, 16 COMP. GEN. 297

A-80343: Sep 22, 1936

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TAXES - STATE - GASOLINE - REFUND PROCEDURE WHERE A STATE REFUSES TO REFUND THE STATE TAX ON GASOLINE DIRECT TO VENDORS IN CASES OF SALES TO THE UNITED STATES FROM WHICH DEDUCTIONS FOR SAID TAX HAVE BEEN MADE BEFORE PAYMENT. CHECKS ISSUED BY A STATE IN FAVOR OF THE UNITED STATES REPRESENTING STATE GASOLINE TAX REFUNDS IN CONNECTION WITH SALES IN WHICH DEDUCTION OF THE AMOUNT OF THE TAX WAS MADE BY THE GOVERNMENT PRIOR TO PAYMENT OF THE VENDOR. YOUR LETTER OF JUNE 15 STATES IN PART: ATTENTION IS INVITED TO THE INCLOSED LETTER FROM THE INTELLIGENCE OFFICER. THE EIGHT ENCLOSURES MENTIONED IN THIS LETTER ARE ALSO INCLOSED. IT WILL BE NOTED THAT ENCLOSURES 1 AND 2 OF SAID LETTER. ARE DRAWN AS PAYABLE TO THE ORDER OF "U.S.

A-80343, SEPTEMBER 22, 1936, 16 COMP. GEN. 297

TAXES - STATE - GASOLINE - REFUND PROCEDURE WHERE A STATE REFUSES TO REFUND THE STATE TAX ON GASOLINE DIRECT TO VENDORS IN CASES OF SALES TO THE UNITED STATES FROM WHICH DEDUCTIONS FOR SAID TAX HAVE BEEN MADE BEFORE PAYMENT, FUTURE PROCEDURE SHOULD BE PAYMENT ON THE BASIS OF TAX INCLUSION, CLAIM FOR REFUND OF THE TAX SO PAID TO BE MADE UPON THE STATE BY THE UNITED STATES ON THE FORM PRESCRIBED BY GENERAL REGULATIONS NO. 86 OF THE GENERAL ACCOUNTING OFFICE, DATED JUNE 19, 1936. CHECKS ISSUED BY A STATE IN FAVOR OF THE UNITED STATES REPRESENTING STATE GASOLINE TAX REFUNDS IN CONNECTION WITH SALES IN WHICH DEDUCTION OF THE AMOUNT OF THE TAX WAS MADE BY THE GOVERNMENT PRIOR TO PAYMENT OF THE VENDOR, SHOULD BE ENDORSED AS DRAWN, THE PROCEEDS DEPOSITED IN THE SPECIAL DEPOSIT ACCOUNT OF THE ACCOUNTABLE OFFICER CONCERNED, AND REFUND MADE TO THE VENDOR FROM SAID ACCOUNT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE COMMANDANT, UNITED STATES COAST GUARD, SEPTEMBER 22, 1936:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTERS OF JUNE 15 AND SEPTEMBER 3, 1936, RELATING TO REFUND OF MASSACHUSETTS STATE TAX ON GASOLINE. YOUR LETTER OF JUNE 15 STATES IN PART:

ATTENTION IS INVITED TO THE INCLOSED LETTER FROM THE INTELLIGENCE OFFICER, NEW YORK DIVISION, U.S. COAST GUARD, DATED 2 JUNE 1936, BEARING INDORSEMENT OF THE COMMANDER, NEW YORK DIVISION, U.S. COAST GUARD, 4 JUNE 1936, REGARDING MASSACHUSETTS STATE TAX ON GASOLINE. THE EIGHT ENCLOSURES MENTIONED IN THIS LETTER ARE ALSO INCLOSED. IT WILL BE NOTED THAT ENCLOSURES 1 AND 2 OF SAID LETTER--- CHECKS OF THE COMMONWEALTH OF MASSACHUSETTS, NOS. 26356 AND 29986, IN THE RESPECTIVE AMOUNTS OF $0.57 AND $1.17, ARE DRAWN AS PAYABLE TO THE ORDER OF "U.S. OF AMERICA, U.S. COAST GUARD, 15 PINE STREET, NEW YORK, N.Y.' IT IS REQUESTED THAT THIS OFFICE BE ADVISED AS TO THE MANNER OF INDORSING CHECKS SO DRAWN AND ALSO AS TO WHAT DISPOSITION SHOULD BE MADE THEREOF.

ATTENTION IS FURTHER INVITED TO PARAGRAPH 2 OF THE INCLOSED LETTER WITH THE REQUEST THAT ANY SUGGESTION WHICH THE GENERAL ACCOUNTING OFFICE MAY HAVE IN CONNECTION WITH THE PROPER PROCEDURE IN THIS CASE BE FURNISHED THIS OFFICE.

IT APPEARS THAT OPEN MARKET PURCHASES OF GASOLINE HAVE BEEN MADE FROM THE SINCLAIR REFINING COMPANY FOR THE OPERATION OF TRUCKS OF THE UNITED STATES COAST GUARD, NEW YORK DIVISION, AND THAT THE GASOLINE WAS DELIVERED AT VARIOUS PLACES IN THE STATES OF MASSACHUSETTS, NEW JERSEY, AND NEW YORK. IN MAKING PAYMENT TO THE SINCLAIR REFINING CO. THERE WAS DEDUCTED ON THE VOUCHERS THE STATE TAX INVOLVED IN THE RESPECTIVE STATES.

IN LETTER OF JUNE 2, 1936, THE INTELLIGENCE OFFICER, NEW YORK DIVISION, UNITED STATES COAST GUARD, STATES IN PART:

* * * INCLOSURE (3) IS IN ANSWER TO AN ENDEAVOR BY THIS OFFICE TO HAVE THE COMMONWEALTH OF MASSACHUSETTS ALLOW THE STATE TAX TO THE SINCLAIR REFINING COMPANY AS HAS BEEN THE PRACTICE IN OTHER STATES, U.S. GOVERNMENT MOTOR FUELS TAX EXEMPTION CERTIFICATE NO. 44 BEING SUBMITTED. HOWEVER, THE STATE OF MASSACHUSETTS REQUIRES THIS OFFICE TO SUBMIT CLAIM FOR TAX EXEMPTION ON THEIR FORM GT 9, INCLOSURE (8), THEY IN TURN ISSUING CHECKS COVERING THE TAX EXEMPTION CLAIMED IN FAVOR OF THE UNITED STATES OF AMERICA--- COAST GUARD, THUS LEAVING AN AMOUNT OPEN ON THE ACCOUNT OF THIS OFFICE WITH THE SINCLAIR REFINING COMPANY.

2. IN VIEW OF THE DELAY NECESSITATED IN THIS ROUTINE IT IS REQUESTED THAT THIS OFFICE BE ADVISED AS TO A BETTER PROCEDURE WHICH WOULD HARMONIZE WITH THE LAWS OF THE STATE OF MASSACHUSETTS.

INCLOSURE (3) IS A COPY OF LETTER DATED MAY 8, 1936, FROM THE COMMISSIONER OF CORPORATIONS AND TAXATION OF THE COMMONWEALTH OF MASSACHUSETTS TO THE LIEUTENANT COMMANDER, UNITED STATES COAST GUARD, READING AS FOLLOWS:

THIS OFFICE IS IN RECEIPT OF SEVERAL APPLICATIONS FOR REFUND FOR THE GASOLINE TAX WITH A NOTATION ON EACH OF THE CLAIMS,"REIMBURSEMENT FOR THIS CLAIM SHOULD BE MADE PAYABLE TO THE SINCLAIR REFINING COMPANY INASMUCH AS THE GOVERNMENT HAS ALREADY DEDUCTED THE MASSACHUSETTS STATE TAX.'

WE REGRET TO INFORM YOU THAT UNDER THE MASSACHUSETTS LAW WE ARE OBLIGED TO MAKE THE REFUND CHECK PAYABLE TO THE APPLICANT WHO MUST BE THE PERSON WHO USED THE GASOLINE WHICH WAS NOT SUBJECT TO A TAX. IN THIS CASE THE REFUND WILL BE MADE PAYABLE TO THE UNITED STATES GOVERNMENT. YOU MAY, IF YOU SO DESIRE, ENDORSE THE CHECK OVER TO THE SINCLAIR REFINING COMPANY.

GENERAL REGULATIONS NO. 86 OF THE GENERAL ACCOUNTING OFFICE, DATED JUNE 19, 1936, WHICH RESCINDED, EFFECTIVE JULY 1, 1936, GENERAL REGULATIONS NO. 73, AND SUPPLEMENT NO. 1 THERETO, DATED JULY 17, 1930, AND SEPTEMBER 29, 1932, RESPECTIVELY, PRESCRIBE THE USE OF A NEW FORM OF UNITED STATES GOVERNMENT TAX EXEMPTION CERTIFICATE, AND PROVIDE:

3. STANDARD FORM NO. 1094---

A. WILL BE USED WHEN A STATE OR LOCAL SALES TAX ATTACHES AT THE TIME OF SALE TO THE CONSUMER AND

(1) THE VENDOR SELLS AT A PRICE EXCLUSIVE OF SUCH TAX, IN WHICH CASE THE FORM WILL BE FOR USE BY THE VENDOR IN CLAIMING EXEMPTION FROM THE PAYMENT OF THE TAX TO THE TAXING AUTHORITY;

(2) THE VENDOR REFUSES TO SELL AT A PRICE EXCLUSIVE OF SUCH TAX, IN WHICH CASE THE FORM WILL BE USED BY THE UNITED STATES GOVERNMENT AS THE BASIS FOR BILLING THE TAXING AUTHORITY FOR A REFUND OF THE TAXES PAID.

IN THIS CONNECTION ATTENTION IS INVITED TO A-28105, A-51607, DATED SEPTEMBER 3, 1936, GRANTING, IN VIEW OF THE DELAY IN THE DISTRIBUTION TO FIELD OFFICES OF STANDARD FORM NO. 1094, THE USE OF STANDARD FORM NOS. 44 AND 1066 TO NOVEMBER 1, 1936.

WHILE IT APPEARS THAT THE SINCLAIR REFINING CO. HAS NOT ACTUALLY REFUSED TO SELL AT A PRICE EXCLUSIVE OF THE MASSACHUSETTS STATE TAX, IT APPEARS THAT THE VENDOR IS NOT GRANTED EXEMPTION FROM THE PAYMENT OF THE TAX TO THE TAXING AUTHORITY IN THAT STATE IN PURCHASES BY THE FEDERAL GOVERNMENT, SUCH AS ARE HERE INVOLVED. IN THE CIRCUMSTANCES WITH RESPECT TO PURCHASES IN MASSACHUSETTS, INSTEAD OF DEDUCTING THE STATE TAX AND FILING CLAIM WITH THE STATE AUTHORITY FOR REFUND ON BEHALF OF THE DEALER, THE PROPER PROCEDURE IS TO PAY THE TAX AND THEN FILE CLAIM FOR REFUND TO THE UNITED STATES IN ITS OWN RIGHT, DISPOSING OF SUCH REFUND IN ACCORDANCE WITH GENERAL REGULATIONS NO. 86.

AS TO THE DISPOSITION OF THE REFUND CHECKS ALREADY RECEIVED, THEY SHOULD BE ENDORSED AS DRAWN, AND THE PROCEEDS THEREOF TAKEN UP IN THE SPECIAL DEPOSIT ACCOUNT OF THE ACCOUNTABLE OFFICER FROM WHICH ACCOUNT REFUND MAY BE MADE TO THE SINCLAIR REFINING CO. IN THIS CONNECTION SEE GENERAL REGULATIONS NO. 87, DATED JUNE 25, 1936.

THE ENCLOSURES WITH YOUR LETTER OF JUNE 15, 1936, INCLUDING THE CHECKS, ARE RETURNED, AS REQUESTED.