B-149279, SEPTEMBER 25, 1962, 42 COMP. GEN. 179

B-149279, SEPTEMBER 25, 1962, 42 COMP. GEN. 179

TAXES - STATE - GASOLINE - RECOVERY PROCEDURE THE ERRONEOUS PAYMENT OF STATE (NEW MEXICO) GASOLINE TAXES TO GASOLINE COMPANIES BY FEDERAL AGENCIES IS PRINCIPALLY THE FAULT OF THE FEDERAL GOVERNMENT RATHER THAN THE GASOLINE COMPANIES WHICH WERE NO MORE THAN THE CHANNEL THROUGH WHICH THE PAYMENTS WERE MADE TO THE STATE; THEREFORE, WITHHOLDING OF AMOUNTS REPRESENTING THE STATE TAXES FROM THE GASOLINE COMPANIES IS NOT PROPER AND ON REFUSAL OF THE STATE TO REFUND THE TAXES, FROM THE GASOLINE COMPANIES IS NOT PROPER AND ON REFUSAL OF THE STATE TO REFUND THE TAXES, THE DEBT SHOULD BE REPORTED TO THE CLAIMS DIVISION OF GENERAL ACCOUNTING OFFICE FOR COLLECTION PURSUANT TO THE INSTRUCTIONS FOR UNCOLLECTIBLE TAX REFUND CLAIMS IN 7 GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES 4830.20.

TO C. L. HARRIS, DEPARTMENT OF THE INTERIOR, SEPTEMBER 25, 1962:

YOUR LETTER OF JUNE 15, 1962, REFERENCE NUMBER 5-360, TRANSMITTED A CLAIM FOR $123.52 FROM TEXACO, INC., REPRESENTING THE AMOUNT WITHHELD FROM CURRENT BILLINGS OF THE COMPANY FOR NEW MEXICO STATE GASOLINE TAXES PAID BETWEEN JULY 1955 AND APRIL 1957, COVERING 2,058.7 GALLONS OF GASOLINE PURCHASED FROM TEXACO FILLING STATIONS IN NEW MEXICO, AND REQUESTED OUR DECISION WHETHER SAID CLAIM SHOULD BE PAID.

WHEN REQUEST IS MADE BY A CERTIFYING OFFICER UNDER SECTION 3 OF THE ACT OF DECEMBER 29, 1941, 55 STAT. 876, 31 U.S.C. 82D, FOR A DECISION OF THE COMPTROLLER GENERAL ON ANY QUESTION OF LAW, THE VOUCHER SUBMITTED TO HIM FOR CERTIFICATION MUST ACCOMPANY THE REQUEST FOR DECISION. 21 COMP. GEN. 1128; 26 ID. 797; 31 ID. 314. IN THE PRESENT CASE YOU HAVE NOT SUBMITTED A VOUCHER AND THE CITED DECISIONS ARE CALLED TO YOUR ATTENTION FOR OBSERVANCE IN THE FUTURE. HOWEVER, SINCE THE QUESTION PRESENTED APPEARS TO HAVE ARISEN IN CONNECTION WITH A VOUCHER WHICH WAS PREPARED FOR YOUR CERTIFICATION, AND THE CLAIMANT APPEARS PRESENTLY TO BE REQUESTING PAYMENT OF THE AMOUNT DEDUCTED, THOSE DECISIONS WILL NOT, IN THIS INSTANCE, BE CONSIDERED AS PRECLUDING A DECISION IN THE MATTER.

THE RECORD BEFORE OUR OFFICE INDICATES THAT THE GASOLINE TAX DIVISION, BUREAU OF REVENUE, STATE OF NEW MEXICO, HAS ACKNOWLEDGED THAT THE GASOLINE TAX HERE IN QUESTION, AS WELL AS TAXES PAID ON PURCHASES FROM SEVERAL OTHER GASOLINE COMPANIES, WAS IMPROPERLY COLLECTED FROM THE GOVERNMENT AND HAS ADMITTED THE VALIDITY OF THE GOVERNMENT'S CLAIMS FOR REFUND. HENCE, NO USEFUL PURPOSE WOULD BE SERVED BY DISCUSSING HERE THE LEGAL PRINCIPLES SUPPORTING THE GOVERNMENT'S RIGHT TO RECOVER SUCH TAXES. HOWEVER, THE GASOLINE TAX DIVISION HAS DENIED ADMINISTRATIVE REQUESTS FOR REFUND OF THE AMOUNTS INVOLVED ON THE BASIS THAT IT HAS NO AUTHORITY TO MAKE SUCH REFUND BECAUSE OF THE STATE STATUTE OF LIMITATIONS ON SAID CLAIMS, AND HAS STATED THAT IT COULD MAKE THE REQUESTED REFUND ONLY UNDER A PROPER ORDER OF A COURT OF COMPETENT JURISDICTION. SINCE EXCEPTIONS WERE STATED BY OUR OFFICE AGAINST THE CERTIFYING OFFICERS WHO CERTIFIED THE VOUCHERS ON WHICH THE TAXES WERE PAID, IT APPEARS THAT, UPON REFUSAL OF THE STATE OF NEW MEXICO TO HONOR THE ADMINISTRATIVE REQUEST FOR REFUND, THE AMOUNTS INVOLVED WERE WITHHELD FROM CURRENT BILLINGS OF THE VARIOUS GASOLINE COMPANIES IN ORDER TO CLEAR SAID EXCEPTIONS. THUS, THE PRIMARY QUESTION TO BE RESOLVED HERE IS NOT WHETHER THE GOVERNMENT IS ENTITLED TO RECOVER THE TAXES PAID--- WHICH ENTITLEMENT IS ADMITTED BY THE STATE--- BUT WHETHER THE GOVERNMENT SHOULD COLLECT FROM THE STATE OR FROM THE GASOLINE COMPANIES THROUGH WHICH THE ERRONEOUS TAX PAYMENT WAS MADE.

WHILE AN ARGUMENT WAS PRESENTED BY YOUR REGIONAL SOLICITOR IN DENVER SUPPORTING THE COLLECTION FROM THE COMPANIES, WE DO NOT AGREE WITH THIS PRACTICE. OBVIOUSLY, THE PARTY ULTIMATELY RECEIVING AND BENEFITING FROM THE IMPROPER TAX PAYMENT WAS THE STATE OF NEW MEXICO. EQUALLY OBVIOUS, THE GOVERNMENT AND NOT THE COMPANIES WAS THE PARTY PRINCIPALLY AT FAULT IN ERRONEOUSLY MAKING PAYMENT OF THE TAX. THE PRIMARY RESPONSIBILITY FOR THE PROPER DISBURSEMENT OF GOVERNMENT FUNDS CLEARLY RESTS WITH THE GOVERNMENT AND NOT WITH THE GASOLINE COMPANIES. THE GASOLINE COMPANIES WERE ESSENTIALLY NO MORE THAN A CHANNEL THROUGH WHICH THE PAYMENTS WERE MADE. MOREOVER, THE COLLECTION PROCEDURES FOR RECOVERY OF ERRONEOUSLY PAID STATE AND LOCAL TAXES ESTABLISHED BY SECTION 4830 OF TITLE 7, GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES, CONTEMPLATES COLLECTION FROM THE STATE AND LOCAL TAXING AUTHORITIES. THE CITED SECTION PROVIDES AS FOLLOWS:

4830.10 COLLECTION OF TAX REFUNDS AND ACCOUNTS TO BE CREDITED. CONSISTENT WITH ADMINISTRATIVE COLLECTION PROCEDURES FOR THE RECOVERY OF DEBTS GENERALLY, THE PURCHASING AGENCIES WILL BILL THE APPROPRIATE STATE AND LOCAL TAXING AUTHORITIES FOR REFUND OF THE TAXES PAID. THE AMOUNTS COLLECTED WILL BE DEPOSITED FOR CREDIT TO THE APPROPRIATIONS FROM WHICH THE VOUCHERS WERE PAID OR TO MISCELLANEOUS RECEIPT ACCOUNT "3099 MISCELLANEOUS RECOVERIES AND REFUNDS, NOT OTHERWISE CLASSIFIED" IF THE APPROPRIATIONS CANNOT BE READILY IDENTIFIED.

4830.20 SUBMISSION OF UNCOLLECTIBLE TAX REFUND CLAIMS TO GENERAL ACCOUNTING OFFICE. SUBJECT TO THE LIMITATIONS PROVIDED IN 4 GAO 5000, THE PURCHASING AGENCIES WILL REPORT UNCOLLECTABLE TAX REFUND CLAIMS TO THE CLAIMS DIVISION, U.S. GENERAL ACCOUNTING OFFICE, WASHINGTON 25, D.C., FOR FURTHER COLLECTION PROCEEDINGS TO SECURE REFUNDS FROM THE TAXING AUTHORITIES. ALL UNCOLLECTIBLES REPORTED TO THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE WILL BE ACCOMPANIED BY THE TAX EXEMPTION CERTIFICATES, IF AVAILABLE, TOGETHER WITH ALL CORRESPONDENCE WITH THE TAXING AUTHORITIES AND A CITATION TO THE VOUCHERS ON WHICH THE TAX PAYMENTS WERE MADE.

THIS IS THE PROCEDURE WHICH SHOULD HAVE BEEN FOLLOWED IN THE PRESENT CASE AND IN ALL SIMILAR CASES.

YOU ARE HEREBY AUTHORIZED TO PAY TO TEXACO, INC., THE AMOUNT CLAIMED IF OTHERWISE CORRECT, AND ALSO TO PAY THE AMOUNTS WITHHELD FROM THE OTHER GASOLINE COMPANIES INVOLVED TO SUCH COMPANIES IF AND WHEN CLAIM IS RECEIVED. SINCE THE STATE OF NEW MEXICO HAS ALREADY REFUSED TO PAY THE GOVERNMENT'S CLAIM FOR REFUND OF THE GASOLINE TAXES ERRONEOUSLY PAID, THIS ITEM AND ANY OTHERS HERE INVOLVED WHICH MAY BE PAID TO THE GASOLINE COMPANIES PURSUANT TO THEIR CLAIMS SHOULD BE REPORTED TO OUR CLAIM DIVISION IN ACCORDANCE WITH THE PROVISIONS OF 7 GAO 4830.20, SUPRA. IT WILL BE NECESSARY TO REINSTATE THIS ITEM, AND ANY OTHERS PAID IN ACCORDANCE HEREWITH, AS EXCEPTIONS AGAINST THE CERTIFYING OFFICERS WHO ORIGINALLY CERTIFIED THE ERRONEOUS TAX PAYMENTS; HOWEVER, NO ACTION TO COLLECT THE AMOUNTS INVOLVED FROM SUCH OFFICERS WILL BE UNDERTAKEN PENDING THE OUTCOME OF OUR EFFORTS TO RECOVER SUCH AMOUNTS FROM THE STATE OF NEW MEXICO.