A-88046, AUGUST 11, 1937, 17 COMP. GEN. 136

A-88046: Aug 11, 1937

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TAXES - STATE - GASOLINE - REFUNDS IN REDUCED AMOUNTS THE UNITED STATES IS ENTITLED TO A REFUND OF THE FULL AMOUNT OF STATE TAX PAID TO A DEALER IN CONNECTION WITH PURCHASE OF GASOLINE FOR OFFICIAL USE REGARDLESS OF AN ARRANGEMENT BY WHICH THE STATE OF TENNESSEE PERMITTED THE DEALER TO RETAIN A PORTION OF THE TAX OTHERWISE PAYABLE. IS AS FOLLOWS: THERE IS FORWARDED HEREWITH FOR ATTENTION FILE RELATIVE TO THE METHOD EMPLOYED BY THE STATE OF TENNESSEE DEPARTMENT OF FINANCE AND TAXATION. THE STATE WAS REQUESTED TO REFUND THE AMOUNT OF $3.36 REPRESENTING STATE TAX OF ?07 PER GALLON ON 48 GALLONS OF GASOLINE PURCHASED BY INDIVIDUALS OF THIS ADMINISTRATION. STATING THAT THIS AMOUNT WAS IN PAYMENT OF THE CLAIM FILED IN THE AMOUNT OF $3.36.

A-88046, AUGUST 11, 1937, 17 COMP. GEN. 136

TAXES - STATE - GASOLINE - REFUNDS IN REDUCED AMOUNTS THE UNITED STATES IS ENTITLED TO A REFUND OF THE FULL AMOUNT OF STATE TAX PAID TO A DEALER IN CONNECTION WITH PURCHASE OF GASOLINE FOR OFFICIAL USE REGARDLESS OF AN ARRANGEMENT BY WHICH THE STATE OF TENNESSEE PERMITTED THE DEALER TO RETAIN A PORTION OF THE TAX OTHERWISE PAYABLE, TO COVER EVAPORATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, AUGUST 11, 1937:

YOUR LETTER OF JULY 28, 1937, IS AS FOLLOWS:

THERE IS FORWARDED HEREWITH FOR ATTENTION FILE RELATIVE TO THE METHOD EMPLOYED BY THE STATE OF TENNESSEE DEPARTMENT OF FINANCE AND TAXATION, NASHVILLE, IN REFUNDING AMOUNTS REPRESENTING STATE TAX ON MOTOR FUEL PURCHASED BY INDIVIDUALS OF THIS ADMINISTRATION AUTHORIZED TO TRAVEL AT GOVERNMENT EXPENSE.

IN COMPLIANCE WITH THE PROVISIONS OF GENERAL ACCOUNTING OFFICE GENERAL REGULATIONS NO. 86, DATED JUNE 25, 1936, AND DECISION OF THE COMPTROLLER GENERAL, DATED FEBRUARY 25, 1936, A-70629, THE STATE WAS REQUESTED TO REFUND THE AMOUNT OF $3.36 REPRESENTING STATE TAX OF ?07 PER GALLON ON 48 GALLONS OF GASOLINE PURCHASED BY INDIVIDUALS OF THIS ADMINISTRATION, FOR THE REASON THAT THE VENDORS REFUSED TO GRANT EXEMPTION OF THE STATE TAX.

THE STATE FORWARDED WARRANT NO. 98746 DATED JUNE 25, 1937, IN THE AMOUNT OF $3.33, STATING THAT THIS AMOUNT WAS IN PAYMENT OF THE CLAIM FILED IN THE AMOUNT OF $3.36. THE MANAGER OF THE FACILITY AT MEMPHIS, TENNESSEE, RETURNED THE WARRANT TO THE STATE JUNE 29, 1937, INVITING ATTENTION TO THE FACT THAT THE AMOUNT HAD BEEN REDUCED AND REQUESTING THAT A WARRANT IN THE FULL AMOUNT BE FORWARDED. UNDER DATE OF JULY 3, 1937, M. S. FOSTER, DIRECTOR, ACCOUNTING DIVISION OF THE DEPARTMENT OF FINANCE AND TAXATION, NASHVILLE, RETURNED THE WARRANT IN THE REDUCED AMOUNT OF $3.33 ADVISING THAT THE CLAIM HAD BEEN REDUCED DUE TO THE FACT THAT THE STATE COLLECTS ONLY 99 PERCENT OF THE ?07 PER GALLON TAX AND THAT THE DEALER IS ALLOWED TO KEEP 1 PERCENT FOR EVAPORATION, AND REQUESTING THAT IN FILING CLAIMS THE AMOUNT TO BE COLLECTED BE COMPUTED AT ?0693 PER GALLON INSTEAD OF ?07 PER GALLON.

IN VIEW OF THE ABOVE FACTS IT WILL BE GREATLY APPRECIATED IF, WITH THE RETURN OF THE ATTACHED FILE, YOU WILL ADVISE ME WHETHER THIS ADMINISTRATION IS AUTHORIZED TO BILL THE STATE OF TENNESSEE AT THE REDUCED RATE PER GALLON OR IF BILLED IN THE FULL AMOUNT, TO ACCEPT REFUND REDUCED BY THE PERCENTAGE.

REGARDLESS OF ANY ARRANGEMENT BY WHICH THE STATE OF TENNESSEE PERMITTED THE DEALER TO RETAIN A PORTION OF THE TAX OTHERWISE PAYABLE TO COVER EVAPORATION, THE FACT REMAINS THAT THE ENTIRE 7 CENTS PER GALLON COLLECTED ON THE SALES FOR THE USE OF THE UNITED STATES WAS COLLECTED BECAUSE OF AND AS THE STATE TAX UPON THE QUANTITY PURCHASED. AS PURCHASES FOR THE BENEFIT OF THE UNITED STATES ARE NOT SUBJECT TO STATE TAX IT FOLLOWS THAT THE FEDERAL GOVERNMENT IS ENTITLED TO A REFUND OF THE FULL AMOUNT OF TAX PAID TO THE DEALER--- THE STATE'S AGENT FOR THE COLLECTION OF THE TAX--- WITHOUT ANY REDUCTION BECAUSE OF THE ALLOWANCE THE STATE MAY MAKE TO THE DEALER TO COVER EVAPORATION OR OTHERWISE. REFUND OF THE FULL AMOUNT OF TAX PAID SHOULD, THEREFORE, BE INSISTED UPON. A-23419, JANUARY 14, 1929, AND FEBRUARY 4, 1930.