B-174335, DEC 8, 1971

B-174335, DEC 8, 1971

CIVILIAN EMPLOYEE - SALES TAX ON MOBILE HOME DECISION AUTHORIZING PAYMENT OF A VOUCHER SUBMITTED BY EDWARD J. HOFFMAN FOR REIMBURSEMENT OF STATE SALES TAX ON THE PURCHASE OF A MOBILE HOME AT HIS NEW OFFICIAL DUTY STATION. SUCH TAX AS HERE INVOLVED SHOULD BE REGARDED AS A CHARGE OR FEE SIMILAR TO A TRANSFER OR MORTGAGE TAX AND THUS A PROPER OBJECT FOR REIMBURSEMENT UNDER SECTION 4, OMB CIRCULAR NO. A-56, REVISED JUNE 26, 1969.

TO BUREAU OF LAND MANAGEMENT:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 12, 1971, REFERENCE 1382 (D-832), WITH ENCLOSURES, REQUESTING OUR DECISION AS TO WHETHER A VOUCHER IN FAVOR OF MR. EDWARD J. HOFFMAN FOR REIMBURSEMENT OF STATE SALES TAX INCURRED BY THE PURCHASE OF A MOBILE HOME AT HIS NEW OFFICIAL DUTY STATION IS TO BE PAID UNDER SECTION 4.2D OR SECTION 3.1B OF OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969.

THE RECORD SHOWS THAT MR. HOFFMAN WAS AUTHORIZED A CHANGE OF OFFICIAL DUTY STATION FROM SALT LAKE CITY, UTAH, TO PHOENIX, ARIZONA, AS AN EMPLOYEE OF THE BUREAU OF LAND MANAGEMENT, UNITED STATES DEPARTMENT OF THE INTERIOR. INCIDENT TO THIS CHANGE OF STATION MR. HOFFMAN PURCHASED A MOBILE HOME FOR RESIDENCE PURPOSES AT THE PHOENIX, ARIZONA, STATION. AMONG THOSE CHARGES ASSESSED MR. HOFFMAN PURSUANT TO THIS RELOCATION WAS AN AMOUNT OF $534 REPRESENTING ARIZONA STATE SALES TAX ON THE MOBILE HOME. HIS CLAIM FOR REIMBURSEMENT OF THIS EXPENSE WAS DISALLOWED BY YOUR OFFICE. YOU HAVE STATED THAT THE TAX INVOLVED IN THE INSTANT CASE IS A -

" *** TAX ON THE SALE OF 'TANGIBLE PERSONAL PROPERTY,' ASSESSED UPON THE SELLER TO BE PASSED ON TO THE PURCHASER, AND IS A TRANSACTION TAX."

THE QUESTION YOU HAVE RAISED IS:

" *** IF THE TAX ON THE PURCHASE OF TANGIBLE PERSONAL PROPERTY BY AN EMPLOYEE IS A REIMBURSABLE ITEM UNDER SECTION 4.2D OF BUREAU OF BUDGET CIRCULAR A-56, OR SHOULD THE CLAIM FOR THIS TAX REIMBURSEMENT BE INCLUDED IN THE ALLOWABLE AMOUNT OF MISCELLANEOUS EXPENSES UNDER SECTION 3.1B OF B.O.B. CIRCULAR A-56."

IT SHOULD BE NOTED THAT THE "SALES TAX" UNDER CONSIDERATION IS IN REALITY A TRANSACTION PRIVILEGE TAX IMPOSED NOT UPON THE PROPERTY BEING SOLD OR THE SALE OF THAT PROPERTY, BUT RATHER UPON THE RETAILER FOR THE PRIVILEGE OF DOING BUSINESS. STATE TAX COMMISSION V CONSUMERS MARKET, INC., 87 ARIZ. 376, 351 P.2D 654 (1960). IT IS AN EXCISE TAX ON THE PRIVILEGE TO ENGAGE IN BUSINESS. INDUSTRIAL URANIUM CO. V STATE TAX COMMISSION, 95 ARIZ. 130, 387 P.2D 1013 (1964). IT DERIVES ITS AUTHORITY FROM ARIZONA REVISED STATUTES, TITLE 42, SECTION 1309. THIS SECTION STATES IN PERTINENT PART THAT:

"THERE IS LEVIED *** FOR THE PURPOSE OF RAISING PUBLIC MONEY *** PRIVILEGE TAXES *** ."

WHAT IS INVOLVED IN THE PRESENT CASE, THEREFORE, IS A REQUEST FOR THE REIMBURSEMENT OF AN EXCISE TAX.

SECTION 4.2D OF OMB CIRCULAR NO. A-56 PROVIDES FOR THE ALLOWANCE OF EXPENSES FOR REIMBURSEMENT OF MORTGAGE OR TRANSFER TAXES. THIS, IN EFFECT, IS A REIMBURSEMENT FOR AN EXCISE TAX ON THE ACT OF TRANSFERRING THE TITLE AND RIGHTS OF OWNERSHIP, NOT A PROPERTY TAX UPON THE ARTICLE ITSELF. IT SHOULD BE NOTED THAT THE ARIZONA TAX HERE INVOLVED IS ALSO NOT A PROPERTY TAX, BUT AN EXCISE TAX, FOR REVENUE PURPOSES. ITS PAYMENT MAY BE SAID TO BE A NECESSARY INCIDENT TO THE PURCHASE OF THE MOBILE HOME SO AS TO MAKE IT LEGALLY HABITABLE AS A RESIDENCE AS WELL AS A PREREQUISITE TO THE EXERCISE OF RIGHTS OF OWNERSHIP IN THE PROPERTY. IN VIEW THEREOF SUCH TAX IS TO BE REGARDED AS A CHARGE OR FEE SIMILAR TO A TRANSFER OR MORTGAGE TAX AND THUS A PROPER OBJECT FOR REIMBURSEMENT UNDER SECTION 4 OF THE CIRCULAR RATHER THAN SECTION 3. CF. B-170954, NOVEMBER 19, 1970, COPY ENCLOSED.

THE VOUCHER, WITH ACCOMPANYING PAPERS, IS RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.