B-118200, APRIL 14, 1954, 33 COMP. GEN. 453

B-118200: Apr 14, 1954

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THE LEGAL INCIDENCE OF THE TAX IS IN FACT IMPOSED UPON THE DISTRIBUTOR RATHER THAN THE CONSUMER OF THE GASOLINE. SO THAT THE FEDERAL GOVERNMENT AS CONSUMER IS NOT IMMUNE TO THE STATE TAX. REQUESTING A DECISION AS TO WHETHER YOU ARE AUTHORIZED TO PAY A VOUCHER TRANSMITTED THEREWITH IN FAVOR OF THE GULF OIL CORPORATION. YOUR INQUIRY IS DIRECTED PARTICULARLY TO THE PROPRIETY OF PAYMENT OF THE $0.05 PER GALLON TAX INCLUDED THEREIN. IN THIS CONNECTION YOU HAVE ENCLOSED WITH YOUR LETTER A COPY OF A " NOTICE TO ORDERING OFFICES" DATED OCTOBER 6. A NOTICE ATTACHED TO THE VENDOR'S INVOICE CONTAINING SUBSTANTIALLY THE SAME LANGUAGE INDICATES THAT THE PROVISION WAS EFFECTIVE AS OF JULY 1. YOU STATE THAT THERE ARE OTHER CLAIMS BEFORE YOUR OFFICE INVOLVING PURCHASES OF GASOLINE IN VERMONT IN QUANTITIES OF LESS THAN 500 GALLONS.

B-118200, APRIL 14, 1954, 33 COMP. GEN. 453

TAXES - STATE - GASOLINE - PURCHASES IN VERMONT - GOVERNMENT IMMUNITY WHILE SECTION 1257 OF THE VERMONT STATUTES, AS REVISED, RELATING TO THE PAYMENT OF THE STATE GASOLINE TAX, PROVIDES THAT THE DISTRIBUTOR SHALL COLLECT SUCH TAX FROM THE DEALER AND THE DEALER FROM THE CONSUMER, THE LEGAL INCIDENCE OF THE TAX IS IN FACT IMPOSED UPON THE DISTRIBUTOR RATHER THAN THE CONSUMER OF THE GASOLINE, BY SECTION 1258 OF THE ACT, SO THAT THE FEDERAL GOVERNMENT AS CONSUMER IS NOT IMMUNE TO THE STATE TAX.

ACTING COMPTROLLER GENERAL WEITZEL TO CAPTAIN O. L. MORRIS, DEPARTMENT OF THE ARMY, APRIL 14, 1954:

BY FIRST ENDORSEMENT DATED DECEMBER 29, 1953, THE CHIEF OF ENGINEERS, DEPARTMENT OF THE ARMY, TRANSMITTED HERE YOUR LETTER OF DECEMBER 21, 1953, REQUESTING A DECISION AS TO WHETHER YOU ARE AUTHORIZED TO PAY A VOUCHER TRANSMITTED THEREWITH IN FAVOR OF THE GULF OIL CORPORATION, IN THE AMOUNT OF $14.03, FOR 55 GALLONS OF GASOLINE DELIVERED TO THE CORPS OF ENGINEERS AT UNION VILLAGE, VERMONT, ON JULY 15, 1953. YOUR INQUIRY IS DIRECTED PARTICULARLY TO THE PROPRIETY OF PAYMENT OF THE $0.05 PER GALLON TAX INCLUDED THEREIN, IMPOSED BY THE STATE OF VERMONT ON PURCHASES OF GASOLINE WITHIN THAT STATE OF QUANTITIES LESS THAN 500 GALLONS.

IN THIS CONNECTION YOU HAVE ENCLOSED WITH YOUR LETTER A COPY OF A " NOTICE TO ORDERING OFFICES" DATED OCTOBER 6, 1953, FROM THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, REGION 1, BOSTON 9, MASSACHUSETTS, INDICATING THAT BY PUBLIC ACT NO. 45 OF THE ACTS OF 1953 ( VERMONT) "SALES MADE BY A DISTRIBUTOR IN BULK LOTS OF NOT LESS THAN 500 GALLONS IN EACH DELIVERY, TO AND FOR THE EXCLUSIVE USE OF THE U.S. GOVERNMENT, MAY BE MADE ON A TAX FREE BASIS UPON PRESENTATION TO THE COMMISSIONER OF SATISFACTORY PROOF OF SUCH SALE.' A NOTICE ATTACHED TO THE VENDOR'S INVOICE CONTAINING SUBSTANTIALLY THE SAME LANGUAGE INDICATES THAT THE PROVISION WAS EFFECTIVE AS OF JULY 1, 1953. ALSO, YOU STATE THAT THERE ARE OTHER CLAIMS BEFORE YOUR OFFICE INVOLVING PURCHASES OF GASOLINE IN VERMONT IN QUANTITIES OF LESS THAN 500 GALLONS, AND PAYMENT OF THE TAX THEREON WILL BE WITHHELD PENDING A DETERMINATION OF THIS CASE.

THE QUESTION OF WHETHER THE UNITED STATES IS REQUIRED TO PAY FOR GASOLINE PROCURED IN A STATE AT A PRICE INCLUSIVE OF THE GASOLINE TAX IMPOSED BY THAT STATE RESTS UPON A DETERMINATION OF WHETHER THE INCIDENCE OF THE TAX IS ON THE VENDOR OR ON THE VENDEE. WHERE THE INCIDENCE OF THE TAX IS ON THE VENDOR, THE UNITED STATES HAS NO RIGHT-- APART FROM STATE STATUTES OR REGULATIONS PROMULGATED THEREUNDER BY STATE AUTHORITIES--- TO PURCHASE GASOLINE WITHIN THE TERRITORIAL JURISDICTION OF THE STATE ON A TAX FREE BASIS. SEE ALABAMA V. KING AND BOOZER, 314 U.S. 1, AND 24 COMP. GEN. 150. ON THE OTHER HAND, WHERE THE INCIDENCE OF THE TAX IS ON THE VENDEE, THE UNITED STATES IN PURCHASING GASOLINE FOR OFFICIAL USE IS ENTITLED UNDER ITS CONSTITUTIONAL PREROGATIVES TO MAKE PURCHASES FREE FROM STATE TAXES AND TO RECOVER ANY AMOUNTS OF SUCH TAXES WHICH MAY HAVE BEEN PAID BY IT.

SECTIONS 1257 AND 1258 OF THE VERMONT STATUTES, AS REVISED, RELATING TO THE PAYMENT OF GASOLINE TAX PROVIDE AS FOLLOWS:

1257. RATE OF TAX; PENALTY. IN ALL CASES NOT EXEMPT FROM SUCH TAX UNDER THE LAWS OF THE UNITED STATES, AT THE TIME OF FILING SUCH REPORT, EACH DISTRIBUTOR SHALL PAY TO THE COMMISSIONER A TAX OF FIVE CENTS PER GALLON UPON EACH GALLON OF SUCH MOTOR FUEL SOLD BY THE DISTRIBUTOR. THE DISTRIBUTOR SHALL COLLECT SUCH TAX FROM THE DEALER AND THE DEALER FROM THE CONSUMER. THE DISTRIBUTOR SHALL ALSO PAY TO THE COMMISSIONER A TAX OF FIVE CENTS PER GALLON UPON EACH GALLON OF SUCH MOTOR FUEL USED WITHIN THE STATE BY HIM. WHEN A DISTRIBUTOR NEGLECTS OR REFUSES TO MAKE THE STATEMENT OR RETURN HEREIN REQUIRED, AN ADDITION OF FIVE PERCENT OF THE AMOUNT OF THE TAX SHALL BE ADDED AND COLLECTED AS A PART OF THE TAX DUE.

1258. ELECTION. A DISTRIBUTOR MAY USE AS THE MEASURE OF THE TAX SO LEVIED AND ASSESSED THE GROSS QUANTITY OF MOTOR FUEL PURCHASED, IMPORTED, PRODUCED, REFINED, MANUFACTURED AND COMPOUNDED BY SUCH DISTRIBUTOR, LESS ONE PERCENT FOR SHRINKAGE, LOSS BY EVAPORATION OR OTHERWISE, IN LIEU OF THE QUANTITY SO SOLD, DISTRIBUTED OR USED.

UNDER THE PROVISION IN SECTION 1257 THAT "THE DISTRIBUTOR SHALL COLLECT SUCH TAX FROM THE DEALER AND THE DEALER FROM THE CONSUMER" THERE MAY BE SOME DOUBT AS TO WHETHER THE LEGAL INCIDENCE IS UPON THE DISTRIBUTOR OR THE ULTIMATE CONSUMER. HOWEVER, IN VIEW OF THE PROVISIONS OF SECTION 1258, IT APPEARS CLEAR THAT SUCH TAX IS IN FACT IMPOSED UPON THE DISTRIBUTOR RATHER THAN THE CONSUMER OF THE GASOLINE. SHOULD THE DISTRIBUTOR FOR ANY REASON FAIL TO COLLECT THE TAX, HIS LIABILITY THEREFOR IS IN NO WAY AFFECTED. HENCE, IT IS THE VIEW OF THIS OFFICE THAT THE LEGAL INCIDENCE OF THE VERMONT GASOLINE TAX IS UPON THE DISTRIBUTOR AND, CONSEQUENTLY, THE CONSTITUTIONAL PRINCIPLE UNDER WHICH THE FEDERAL GOVERNMENT IS IMMUNE TO STATE TAXATION IS NOT APPLICABLE THERETO. SEE ESSO STANDARD OIL CO. V. EVANS, 345 U.S. 495, AND 24 COMP. GEN. 150.

ACCORDINGLY, PAYMENT ON THE VOUCHER, WHICH IS RETURNED HEREWITH, IS AUTHORIZED, IF OTHERWISE CORRECT.