[Request for Decision Concerning Propriety of Payment by Federal Government of Gasoline Sales Tax]

In response to a U.S. Customs Service request, GAO examined the propriety of payment by the Government of the Vermont sales tax on gasoline. In a decision, GAO had ruled that, because the language of a Vermont statute indicated that the legal incidence of the tax fell on the purchaser, the Government was immune from payment of the tax. However, Vermont later amended the applicable statute and, since the amended statute eliminated the requirement that the tax be collected from the dealer and then from the consumer, the legal incidence of the tax fell on the vendor. The Government, as a retail purchaser, was permitted to shoulder the economic burden of such State taxes. Accordingly, the previous decision was deemed to be inapplicable, and payment for gasoline purchases by the Government in Vermont may be inclusive of the amount of tax.