A-93921, JUNE 1, 1938, 17 COMP. GEN. 1039

A-93921: Jun 1, 1938

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NOTWITHSTANDING THE CONTRACTOR WAS ON NOTICE THAT IF BID PRICES CONTEMPLATED REFUND. SPACE WAS PROVIDED FOR SUCH A SHOWING IN ADDITION TO OTHER PROVISIONS RELATIVE TO SAID TAXES. THE CONTRACTOR NEVERTHELESS FAILS TO MAKE AN AFFIRMATIVE SHOWING ON ITS BID THAT THE FEDERAL EXCISE TAX WAS NOT INCLUDED IN THE PRICE QUOTED. NO MODIFICATION OR ALTERATION OF THE BID WITH RESPECT THERETO IS AUTHORIZED AFTER THE BIDS ARE OPENED AND PRICES KNOWN. THE PRICE BID IS INCLUSIVE OF THE SAID TAX AND THAT NO SUBSEQUENT STATEMENT THAT THE TAX ACTUALLY WAS EXCLUDED MAY BE ACCEPTED AS JUSTIFYING THE FURNISHING OF A TAX EXEMPTION CERTIFICATE. WE BID AND WERE AWARDED TWO UNITS BY THE U.S. WE HAVE APPLIED TO THE ENGINEERS OFFICE IN ST.

A-93921, JUNE 1, 1938, 17 COMP. GEN. 1039

TAXES - FEDERAL - EXEMPTION CERTIFICATES - BIDDER'S FAILURE TO SHOW EXCLUSION OF TAX FROM BID PRICE WHERE, NOTWITHSTANDING THE CONTRACTOR WAS ON NOTICE THAT IF BID PRICES CONTEMPLATED REFUND, CREDIT, OR DRAWBACK OF ANY DESCRIPTION UNDER THE EXCISE TAX OF THE REVENUE ACT OF 1932, AS AMENDED, THAT FACT SHOULD AFFIRMATIVELY APPEAR ON THE BID, AND SPACE WAS PROVIDED FOR SUCH A SHOWING IN ADDITION TO OTHER PROVISIONS RELATIVE TO SAID TAXES, THE CONTRACTOR NEVERTHELESS FAILS TO MAKE AN AFFIRMATIVE SHOWING ON ITS BID THAT THE FEDERAL EXCISE TAX WAS NOT INCLUDED IN THE PRICE QUOTED, NO MODIFICATION OR ALTERATION OF THE BID WITH RESPECT THERETO IS AUTHORIZED AFTER THE BIDS ARE OPENED AND PRICES KNOWN, IT BEING PRESUMED, AS HELD IN THE REPORTED DECISIONS IN 16 COMP. GEN. 1054; ID. 1095, THAT, UNLESS OTHERWISE STATED, THE PRICE BID IS INCLUSIVE OF THE SAID TAX AND THAT NO SUBSEQUENT STATEMENT THAT THE TAX ACTUALLY WAS EXCLUDED MAY BE ACCEPTED AS JUSTIFYING THE FURNISHING OF A TAX EXEMPTION CERTIFICATE.

ACTING COMPTROLLER GENERAL ELLIOTT OT FLEET SALES DIVISION, GENERAL MOTORS SALES CORPORATION, JUNE 1, 1938:

YOUR REQUEST TO BE FURNISHED A FEDERAL EXCISE TAX EXEMPTION CERTIFICATE IN THE AMOUNT OF $43.30 HAS BEEN TRANSMITTED TO THIS OFFICE BY THE WAR DEPARTMENT, TOGETHER WITH YOUR LETTER OF FEBRUARY 23, 1938, TO THE CHIEF OF ENGINEERS, WAR DEPARTMENT, AS FOLLOWS:

WITH REFERENCE TO YOUR INVITATION NO. 1103-38-35, WE BID AND WERE AWARDED TWO UNITS BY THE U.S. ENGINEERS OFFICE AT ST. LOUIS, MO. THE PRICE QUOTED ON THESE UNITS DID NOT INCLUDE FEDERAL EXCISE TAX OF $43.30.

WE HAVE APPLIED TO THE ENGINEERS OFFICE IN ST. LOUIS FOR TAX EXEMPTION CERTIFICATE THROUGH OUR MR. H. E. SIMMONS, WHOSE OFFICE IS LOCATED IN THAT CITY. MR. SIMMONS ADVISES US THAT MR. REINECKE, THE DISTRICT ENGINEER, ADVISES THAT DUE TO THE FACT THAT THESE BIDS DID NOT REQUEST EXEMPTION CERTIFICATES, THAT IT WAS IMPOSSIBLE FOR THEIR OFFICE TO FURNISH THESE CERTIFICATES, AND SUGGESTED THAT WE TAKE IT UP IN WASHINGTON.

THE INVITATION TO BID, ON PAGE 2 CONTAINED THE FOLLOWING:

"THE PRICES HEREIN DO NOT INCLUDE ANY FEDERAL TAXES FROM WHICH EXEMPTION IS GRANTED, OR AS TO WHICH A CREDIT OR REFUND IS PROVIDED FOR UNDER THE PROVISIONS OF SECTION 401 OF THE REVENUE ACT OF 1935 (ACT OF AUGUST 30, 1935, 49 STAT. 1014, 1025-1026); NOR ANY TAX IMPOSED BY A STATE, COUNTY, OR MUNICIPALITY UPON THE TRANSACTION OF THIS PROCUREMENT OF THESE MATERIALS. (PROCUREMENT CIRCULAR NO. 16, W.D. 1936.)

AND LEFT A BLANK SPACE FOR SUCH COMMENT AS THE BIDDER DESIRED TO MAKE. WE INSERTED NO STATEMENT IN THE BLANK SPACE PROVIDED FOR, FOR THE REASON THAT THE TAX ON THESE UNITS HAD NOT BEEN PAID BY THIS ORGANIZATION, NOR WOULD BE PAID AS IT IS OUR POLICY TO PRESENT EXEMPTION CERTIFICATE TO AVOID PAYMENT OF THE TAX, RATHER THAN TO MAKE PAYMENT AND THEN CLAIM A REFUND, AND WE INTERPRETED THE ABOVE PROVISION AS NOT REQUIRING AN AFFIRMATIVE STATEMENT IN THE EVENT THE TAX HAD NOT BEEN PAID, AND THAT THE SECURING OF A REFUND WAS NOT INTENDED.

IN VIEW OF THESE FACTS, WE BELIEVE THAT YOU CAN SEE YOUR WAY CLEAR TO ISSUE THE EXEMPTION CERTIFICATE INVOLVED, OR ASK THE ENGINEERS OFFICE AT ST. LOUIS TO DO SO.

WILL YOU PLEASE GIVE THIS MATTER YOUR PROMPT ATTENTION.

THE INVITATION FOR BIDS, PAGE 2, INCLUDED THE FOLLOWING PROVISION:

IF THE BID PRICES STATED HEREIN CONTEMPLATE REFUND, CREDIT, OR DRAW BACK OF ANY DESCRIPTION UNDER THE EXCISE TAX OF THE REVENUE ACT OF 1932 AS AMENDED, THE FACT SHOULD AFFIRMATIVELY APPEAR IN THE SPACE PROVIDED THEREFOR BELOW.

AND THERE FOLLOWED A BLANK LINED SPACE FOR USE BY BIDDERS IN MAKING THE AFFIRMATIVE SHOWING REQUIRED TO THAT EFFECT. NO NOTATION WHATSOEVER APPEARED ON YOUR BID TO INDICATE OR SUGGEST THAT THE FEDERAL EXCISE TAX WAS EXCLUDED FROM YOUR BID PRICE OF $749.74 PER UNIT FOR THE TWO VEHICLES INVOLVED, ALTHOUGH THE SHEET CONTAINING THE QUOTED PROVISION AND OTHER SHEETS OF THE BID FORM WERE SIGNED BY THE PONTIAC MOTORDIVISION, BY H. C. DAVIS, OFFICE AND DISTRICT MANAGER.

IT HAS BEEN POINTED OUT IN THE DECISIONS OF THIS OFFICE THAT SECTION 401 OF THE REVENUE ACT OF AUGUST 30, 1935, 49 STAT. 1035, FURTHER AMENDING THE REVENUE ACT OF 1932, LEAVES A BIDDER, MANUFACTURER, OR OTHERWISE, FREE TO INCLUDE OR EXCLUDE THE AMOUNT OF THE APPLICABLE FEDERAL EXCISE TAX IN SUBMITTING BIDS TO THE GOVERNMENT, AND THAT THE REGULATIONS ISSUED BY THE COMMISSIONER OF INTERNAL REVENUE PURSUANT TO SAID ACT PLACE UPON THE MANUFACTURER THE ENTIRE RESPONSIBILITY OF ESTABLISHING THE FACTS ENTITLING HIM TO CREDIT, REBATE, OR REFUND OF THE TAX, 15 COMP. GEN. 588; THAT IN ORDER TO ENTITLE A CONTRACTOR TO A TAX EXEMPTION CERTIFICATE, THE EXCLUSION OF THE AMOUNT OF THE EXCISE TAX FROM THE BID PRICE MUST AFFIRMATIVELY APPEAR UPON THE FACE OF THE BID WHEN SUBMITTED, OR IF THE TAX IS INCLUDED AND THE BIDDER IS WILLING TO HAVE AN EQUIVALENT AMOUNT DEDUCTED FROM THE BID PRICE, THAT FACT SHOULD APPEAR UPON THE FACE OF THE BID, 16 COMP. GEN. 832; THAT AFTER BIDS ARE OPENED AND PRICES ARE KNOWN, NO MODIFICATION OR ALTERATION OF A BID WITH RESPECT TO THE EXCLUSION OR INCLUSION OF TAXES IS PERMISSIBLE, 15 COMP. GEN. 1030; AND THAT WHEN A BID AS SUBMITTED DOES NOT AFFIRMATIVELY SHOW THE EXCLUSION OF THE EXCISE TAX, IT IS PRESUMED TO BE INCLUSIVE THEREOF, AND NO SUBSEQUENT STATEMENT OF A CONTRACTOR THAT THE AMOUNT OF THE EXCISE TAX ACTUALLY WAS EXCLUDED FROM HIS BID AND CONTRACT PRICE MAY BE ACCEPTED AS JUSTIFYING THE FURNISHING OF A TAX EXEMPTION CERTIFICATE, 16 COMP. GEN. 1054; ID. 1095.

IN THE PRESENT INSTANCE, YOUR COMPANY WAS PUT ON NOTICE THAT IF BID PRICES CONTEMPLATED REFUND, CREDIT OR DRAW-BACK OF ANY DESCRIPTION UNDER THE EXCISE TAX OF THE REVENUE ACT OF 1932, AS AMENDED, THE FACT SHOULD AFFIRMATIVELY APPEAR ON THE FACE OF THE BID AND SPACE WAS PROVIDED FOR SUCH A SHOWING. THE ONLY METHOD OF OBTAINING SUCH REFUND, CREDIT OR DRAW- BACK WAS BY MEANS OF A TAX EXEMPTION CERTIFICATE AS PROVIDED BY THE REGULATIONS OF THE COMMISSIONER OF INTERNAL REVENUE. HENCE, THE MEANING OF THE CITED PROVISION IN THE INVITATION WAS MANIFEST AND NOT OPEN TO MISUNDERSTANDING. SINCE YOUR BID MADE NO SUCH AFFIRMATIVE SHOWING, THE FAILURE TO DO SO IS CONCLUSIVE UPON YOU, AND CONSTITUTES AT MOST A UNILATERAL MISTAKE ON YOUR PART FOR WHICH NO RELIEF MAY BE GRANTED, 16 COMP. GEN. 1054.

ACCORDINGLY, THERE APPEARS NO AUTHORITY FOR FURNISHING YOU WITH A FEDERAL EXCISE TAX EXEMPTION CERTIFICATE AT THIS TIME, AND YOUR REQUEST MUST BE AND IS DENIED, 16 COMP. GEN. 1095.