B-113908, APRIL 1, 1953, 32 COMP. GEN. 423

B-113908: Apr 1, 1953

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IS A BUSINESS PRIVILEGE TAX UPON THE SELLER. 1953: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 26. SUCH TAX RECENTLY WAS IMPOSED BY THE CITY OF KANSAS CITY. EVERY SUCH PERSON WHO SHALL HAVE STORED. IT IS EXPLAINED THAT THE CITY HAS ADVISED THE OIL COMPANIES THAT IT WILL NO LONGER ACCEPT TAX EXEMPTION CERTIFICATES FOR TAX ON SERVICE STATION DELIVERIES TO GOVERNMENT VEHICLES WITHIN THE CITY AFTER SUCH DATE. IT IS APPARENT THAT THE LEGAL INCIDENCE OF THE TAX RESTS UPON THE SELLER RATHER THAN THE PURCHASER AND CONSEQUENTLY THE CONSTITUTIONAL PRINCIPLE UNDER WHICH THE FEDERAL GOVERNMENT IS IMMUNE TO STATE TAXATION IS NOT APPLICABLE THERETO. IF UNDER EITHER (1) OR (2) THE CONTRACTOR IS OBLIGED TO AND DOES PAY OR BEAR THE BURDEN OF ANY SUCH TAX (AND DOES NOT SECURE A REFUND THEREOF).

B-113908, APRIL 1, 1953, 32 COMP. GEN. 423

TAXES - STATE - GASOLINE - VENDORS PAYMENT LIABILITY THE GASOLINE TAX IMPOSED BY KANSAS CITY, MISSOURI, IS A BUSINESS PRIVILEGE TAX UPON THE SELLER, AND THEREFORE, A GENERAL SUPPLY SCHEDULE CONTRACTOR FURNISHING GASOLINE UNDER A CONTRACT PROVIDING FOR PRICE ADJUSTMENT IN EVENT OF TAX ASSESSMENTS AFTER THE CONTRACT DATE MAY BE REIMBURSED FOR THE TAX IMPOSED AND PAID AFTER SAID DATE.

COMPTROLLER GENERAL WARREN TO ERVIN J. STETINA, DEPARTMENT OF COMMERCE, APRIL 1, 1953:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 26, 1953, REQUESTING TO BE ADVISED WHETHER THE TWO VOUCHERS ENCLOSED THEREWITH PROPERLY MAY BE CERTIFIED FOR PAYMENT.

THE AMOUNTS OF THE VOUCHERS REPRESENT CLAIMS BY GENERAL SUPPLY SCHEDULE CONTRACTORS FOR A TAX OF TWO CENTS PER GALLON ON DELIVERIES OF MOTOR FUEL PURCHASED BY THE GOVERNMENT. SUCH TAX RECENTLY WAS IMPOSED BY THE CITY OF KANSAS CITY, MISSOURI, UNDER AN ORDINANCE WHICH PROVIDES IN PERTINENT PART, AS FOLLOWS:

SECTION 30-5. AMOUNT OF LICENSE FEES: WHEN PAYABLE. EVERY PERSON, AS DEFINED IN SECTION 30-1 OF THIS CHAPTER, ENGAGED IN THE BUSINESS OF SELLING, OFFERING FOR SALE, STORING OR TRANSPORTING ANY MOTOR FUEL SHALL REGISTER WITH THE COMMISSIONER OF LICENSES AND MAKE APPLICATION FOR A LICENSE TO CARRY ON SAID BUSINESS. THE REGISTRATION FEE SHALL BE INCLUDED WITH THE INSPECTION FEE AS SET FORTH IN SECTION 30-16 OF THIS CHAPTER, EXCEPT THAT AN ADDITIONAL FEE OF $1.00 SHALL BE PAID UPON THE TRANSFER OF SUCH REGISTRATION, FROM PERSON TO PERSON, OR FROM LOCATION TO LOCATION, AND EVERY SUCH PERSON WHO SHALL HAVE STORED, TRANSPORTED, SOLD OR OFFERED FOR SALE ANY MOTOR FUEL UPON WHICH THE TAX HEREIN PROVIDED FOR HAS NOT BEEN PAID, SHALL THEREAFTER FILE A REPORT TO BE RECEIVED BY THE COMMISSIONER OR LICENSES ON OR BEFORE THE 25TH DAY OF EACH MONTH, CONTAINING SUCH INFORMATION AS MAY BE REQUIRED BY THE COMMISSIONER OF LICENSES, AND PAY TO THE COMMISSIONER OF LICENSES A LICENSE TAX UPON THE PRIVILEGE OF ENGAGING IN SUCH BUSINESS, EQUAL TO TWO CENTS (2 CENTS) FOR EACH GALLON OF MOTOR FUEL SO SOLD, TRANSPORTED OR STORED BY SUCH PERSON DURING THE NEXT PRECEDING CALENDAR MONTH WITHIN THE CORPORATE LIMITS OF THE CITY OF KANSAS CITY, MISSOURI * * * PROVIDED: * * * * * * * *

(4) THAT SUCH TAX SHALL BE IN LIEU OF ANY OTHER CITY LICENSE TAX UPON THE PRIVILEGE OF ENGAGING IN SUCH BUSINESS.

THIS ORDINANCE BECAME EFFECTIVE NOVEMBER 1, 1952, AND IT IS EXPLAINED THAT THE CITY HAS ADVISED THE OIL COMPANIES THAT IT WILL NO LONGER ACCEPT TAX EXEMPTION CERTIFICATES FOR TAX ON SERVICE STATION DELIVERIES TO GOVERNMENT VEHICLES WITHIN THE CITY AFTER SUCH DATE.

SINCE THE TAX APPEARS TO BE--- AS STATED IN THE SECTION OF THE ORDINANCE QUOTED--- A LICENSE TAX UPON THE PRIVILEGE OF ENGAGING IN THE BUSINESS OF SELLING, OFFERING FOR SALE, STORING OR TRANSPORTING ANY MOTOR FUEL, IT IS APPARENT THAT THE LEGAL INCIDENCE OF THE TAX RESTS UPON THE SELLER RATHER THAN THE PURCHASER AND CONSEQUENTLY THE CONSTITUTIONAL PRINCIPLE UNDER WHICH THE FEDERAL GOVERNMENT IS IMMUNE TO STATE TAXATION IS NOT APPLICABLE THERETO. SEE 24 COMP. GEN. 150.

THAT BEING THE CASE, AND SINCE THE GENERAL SUPPLY SCHEDULE, CLASSES 7 AND 14, PROVIDES IN PARAGRAPH 9 (E) THAT---

IF, AFTER THE CONTRACT DATE, THE FEDERAL GOVERNMENT OR ANY STATE OR LOCAL GOVERNMENT EITHER (1) IMPOSES OR INCREASES (OR REMOVES AN EXEMPTION WITH RESPECT TO) ANY DIRECT TAX, OR ANY TAX DIRECTLY APPLICABLE TO THE MATERIALS OR COMPONENTS USED IN THE MANUFACTURE OR FURNISHING OF THE COMPLETED SUPPLIES OR SERVICES COVERED BY THIS CONTRACT, OR (2) REFUSES TO ACCEPT THE EVIDENCE OF EXEMPTION, FURNISHED UNDER PARAGRAPH (D) HEREOF, WITH RESPECT TO ANY DIRECT TAX EXCLUDED FROM THE CONTRACT PRICE, AND IF UNDER EITHER (1) OR (2) THE CONTRACTOR IS OBLIGED TO AND DOES PAY OR BEAR THE BURDEN OF ANY SUCH TAX (AND DOES NOT SECURE A REFUND THEREOF), THE CONTRACT PRICE SHALL BE CORRESPONDINGLY INCREASED. * * * YOU ARE ADVISED THAT THE VOUCHERS, WHICH ARE RETURNED HEREWITH, MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE CORRECT. SEE 27 COMP. GEN. 767 AND 28 ID. 706. CF. 31 COMP. GEN. 1.