B-135518, MAR. 25, 1958

B-135518: Mar 25, 1958

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF MARCH 14. YOU STATE THAT USERS OF INTERAGENCY MOTOR POOL VEHICLES ARE ISSUED CREDIT CARDS WHICH ARE UTILIZED FOR THE PURCHASE OF GASOLINE AT SERVICE STATIONS AFFILIATED WITH THE CONTRACTOR OIL COMPANIES LOCATED THROUGHOUT THE UNITED STATES. WHERE INDIVIDUAL PURCHASES ARE MADE IN MANY DIFFERENT LOCATIONS. YOU CITE THE FOLLOWING AS BEING AMONG THE MANY INDIRECT COSTS WHICH YOU HAVE NOT ATTEMPTED TO EVALUATE: "/1) UPDATING VARIOUS LISTS OF CITIES AND TOWNS ALLOWING EXEMPTIONS AS PROVIDED BY THE OIL COMPANIES AND OTHER SOURCES. IT IS YOUR STATED VIEW THAT IF THE VALUE OF SUCH INDIRECT COSTS WERE ADDED TO THE DIRECT COSTS. IT IS LIKELY THAT THE COMBINED AMOUNT WOULD EXCEED THE TOTAL REALIZED FROM THE ISSUANCE OF MUNICIPAL TAX EXEMPTION CERTIFICATES IN ALL DENOMINATIONS.

B-135518, MAR. 25, 1958

TO THE HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 14, 1958, REQUESTING OUR VIEWS AS TO THE PROPRIETY OF WAIVING THE ISSUANCE OF U.S. GOVERNMENT TAX EXEMPTION CERTIFICATES FOR MUNICIPAL TAXES WHERE SUCH TAXES WOULD AMOUNT TO $1 OR LESS.

YOU STATE THAT USERS OF INTERAGENCY MOTOR POOL VEHICLES ARE ISSUED CREDIT CARDS WHICH ARE UTILIZED FOR THE PURCHASE OF GASOLINE AT SERVICE STATIONS AFFILIATED WITH THE CONTRACTOR OIL COMPANIES LOCATED THROUGHOUT THE UNITED STATES. THIS, YOU STATE, RESULTS IN THE ISSUANCE OF NUMEROUS TAX EXEMPTION CERTIFICATES, IN RELATIVELY SMALL AMOUNTS, PARTICULARLY IN THE CASE OF MUNICIPAL TAXES, WHERE INDIVIDUAL PURCHASES ARE MADE IN MANY DIFFERENT LOCATIONS, WITH ONLY A SMALL TAX CHARGE FOR EACH MUNICIPALITY ON A SINGLE INVOICE FROM A CONTRACTING OIL COMPANY.

AS TO THE PREPARATION AND PROCESSING OF THESE CERTIFICATES, YOU REPORT THAT A STUDY OF THE DIRECT COSTS INVOLVED IN ISSUING 721 CERTIFICATES FOR $1 OR LESS REVEALED THAT THE DIRECT COSTS ALONE FOR PERSONAL SERVICES AND FORMS AMOUNTED TO $145.95, AS COMPARED WITH $138.59 REALIZED IN TAX EXEMPTIONS FROM THE CERTIFICATES ISSUED. IN ADDITION, YOU CITE THE FOLLOWING AS BEING AMONG THE MANY INDIRECT COSTS WHICH YOU HAVE NOT ATTEMPTED TO EVALUATE:

"/1) UPDATING VARIOUS LISTS OF CITIES AND TOWNS ALLOWING EXEMPTIONS AS PROVIDED BY THE OIL COMPANIES AND OTHER SOURCES;

"/2) CORRESPONDENCE AND CLAIMS FOR DISALLOWED CERTIFICATES RESULTING FROM CHANGE IN EXEMPTION OR CANCELLATION THROUGH ACTION OF LOCATION GOVERNMENT BY ORDINANCE OR EDICT;

"/3) LEGAL RESEARCH AND CORRESPONDENCE TO RESOLVE QUESTIONS WHICH ARISE AS TO THE TYPE OF TAX INVOLVED.'

IT IS YOUR STATED VIEW THAT IF THE VALUE OF SUCH INDIRECT COSTS WERE ADDED TO THE DIRECT COSTS, IT IS LIKELY THAT THE COMBINED AMOUNT WOULD EXCEED THE TOTAL REALIZED FROM THE ISSUANCE OF MUNICIPAL TAX EXEMPTION CERTIFICATES IN ALL DENOMINATIONS.

ON THE BASIS OF THE FACTS AS REPORTED, OUR OFFICE WOULD NOT BE REQUIRED TO OBJECT TO THE PROMULGATION OF INSTRUCTIONS BY YOUR ADMINISTRATION WHEREBY THE ISSUANCE OF TAX EXEMPTION CERTIFICATES FOR MUNICIPAL TAXES AMOUNTING TO $1 OR LESS MAY BE WAIVED.