B-36378, SEPTEMBER 13, 1943, 23 COMP. GEN. 188

B-36378, SEPTEMBER 13, 1943, 23 COMP. GEN. 188

TRAVELING EXPENSES - CASH FARES - REIMBURSEMENT OF FEDERAL TAX ON THE TRANSPORTATION OF PERSONS WHERE AN EMPLOYEE TRAVELING ON OFFICIAL BUSINESS PROCURES TRANSPORTATION BY PAYMENT OF A CASH FARE OF LESS THAN $1 RATHER THAN BY ISSUANCE OF A TRANSPORTATION REQUEST, AS PERMITTED BY PARAGRAPH 20 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, AND DOES NOT EXECUTE AN EXEMPTION CERTIFICATE IN LIEU OF THE PAYMENT OF THE TAX ON THE TRANSPORTATION OF PERSONS IMPOSED BY THE REVENUE ACT OF 1942, THE AMOUNT OF THE TAX SO PAID PROPERLY MAY BE CONSIDERED AS A PART OF THE TRANSPORTATION EXPENSE ACTUALLY AND NECESSARILY INCURRED BY THE TRAVELER FOR WHICH REIMBURSEMENT IS AUTHORIZED.

ACTING COMPTROLLER GENERAL YATES TO THOMAS SMART, DEPARTMENT OF AGRICULTURE, SEPTEMBER 13, 1943:

THERE HAS BEEN CONSIDERED YOUR LETTER OF AUGUST 12, 1943, AS FOLLOWS:

THE ATTACHED VOUCHER FOR REIMBURSEMENT OF OFFICIAL TRAVEL EXPENSE, STANDARD FORM 1012, IN FAVOR OF WALTER T. CLARK, REPRESENTS RECLAIM FOR CASH BUS FARE PAID BY AN EMPLOYEE OF THIS AGENCY TRAVELING ON OFFICIAL BUSINESS, WHICH WAS SUSPENDED FROM THE VOUCHER CITED ON THE ATTACHED COPY OF ADMINISTRATIVE DIFFERENCE STATEMENT FOR THE REASONS APPEARING THEREON.

SECTION 554 OF THE REVENUE ACT OF 1941 ( PUBLIC LAW 250--- 77TH CONGRESS) IMPOSES A TAX UPON THE AMOUNT PAID WITHIN THE UNITED STATES ON OR AFTER OCTOBER 10, 1941, FOR THE TRANSPORTATION OF PERSONS (RATE OF TAX INCREASED BY SECTION 609 OF THE REVENUE ACT OF 1942, PUBLIC LAW 753--- 77TH CONGRESS) AND INSERTS AS SUBSECTION (F) OF SECTION 3649 OF CHAPTER 30 OF THE INTERNAL REVENUE CODE, CERTAIN PROVISIONS REGARDING EXEMPTIONS FROM THE TAX ON TRANSPORTATION OF PERSONS, QUOTED IN PART AS FOLLOWS:

"/1) GOVERNMENTAL EXEMPTION--- THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO THE PAYMENT FOR TRANSPORTATION OR FACILITIES FURNISHED TO THE UNITED STATES OR TO ANY STATE OR TERRITORY, OR POLITICAL SUBDIVISION THEREOF, OR THE DISTRICT OF COLUMBIA.'

A SIMILAR PROVISION IS CONTAINED IN SECTION 620 OF THE REVENUE ACT OF 1942 WITH REGARD TO THE IMPOSITION OF A TAX UPON THE AMOUNT PAID WITHIN THE UNITED STATES FOR THE TRANSPORTATION OF PROPERTY. IN DECISION NO. B- 34217, DATED MAY 15, 1943, (22 COMP. GEN. 1042), IT WAS HELD, QUOTING THE SYNOPSIS:

"WHERE A CIVILIAN EMPLOYEE, UPON CHANGE OF STATION, IS REQUIRED TO PAY THE TRANSPORTATION EXPENSE INCIDENT TO THE TRANSFER OF HIS HOUSEHOLD GOODS AND PERSONAL EFFECTS, RATHER THAN BEING PERMITTED TO EFFECT SHIPMENT ON GOVERNMENT BILL OF LADING OR PURCHASE ORDER, OTHERWISE PROPER REIMBURSEMENT AUTHORIZED BY SECTION 6, EXECUTIVE ORDER NO. 8588, AS AMENDED, OF TRANSPORTATION EXPENSE ACTUALLY AND NECESSARILY INCURRED, MAY INCLUDE AMOUNTS EXPENDED BY THE EMPLOYEE FOR THE PROPER TRANSPORTATION TAX IMPOSED BY SECTION 620 OF THE INTERNAL REVENUE ACT OF 1942.'

THERE ARE GENERALLY AVAILABLE TO GOVERNMENT EMPLOYEES TRAVELING ON OFFICIAL BUSINESS TWO MEANS OF OBTAINING EXEMPTION FROM THE PAYMENT OF TAX FOR TRANSPORTATION SECURED ON OFFICIAL BUSINESS--- VIZ., THE USE OF A GOVERNMENT TRANSPORTATION REQUEST AND THE ISSUANCE OF A TAX EXEMPTION CERTIFICATE STANDARD FORM 1094. FREQUENTLY, THE LATTER FORMS ARE NOT AVAILABLE TO EMPLOYEES WHILE IN A TRAVEL STATUS, AND ARE NOT MADE AVAILABLE BY THE CARRIER'S AGENT AT THE TIME A TICKET IS PURCHASED. OCCASIONALLY THE SUPPLY OF GOVERNMENT TRANSPORTATION REQUESTS ISSUED TO AN EMPLOYEE IS UNAVOIDABLY EXHAUSTED PRIOR TO THE COMPLETION OF OFFICIAL TRAVEL. IN ADDITION, IT MAY BE NOTED, WITH PARTICULAR APPLICATION TO THE PRESENT CLAIM, THAT PARAGRAPH 20 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS DOES NOT REQUIRE THE USE OF A TRANSPORTATION REQUEST WHERE THE AMOUNT INVOLVED IS LESS THAN$1.00. UNDER THE CIRCUMSTANCES JUST DESCRIBED, IT NOT INFREQUENTLY OCCURS THAT AN EMPLOYEE TRAVELING ON OFFICIAL BUSINESS IS REQUIRED TO PAY CASH, INCLUDING THE APPLICABLE TAX, FOR TRANSPORTATION BY RAIL OR MOTOR COACH.

IN VIEW OF THE FOREGOING, YOUR DECISION IS RESPECTFULLY REQUESTED AS TO WHETHER THE ATTACHED VOUCHER MAY PROPERLY BE CERTIFIED IN THE FULL AMOUNT CLAIMED OR WHETHER IT IS REQUIRED THAT THE AMOUNT OF TAX PAID BE DEDUCTED FROM THE VOUCHER IN EFFECTING SETTLEMENT.

THE BUS FARE CLAIMED BY THE EMPLOYEE ON THE SUBMITTED VOUCHER IS IN THE SUM OF 50 CENTS WHICH AMOUNT WAS ADMINISTRATIVELY SUSPENDED FROM THE PARENT VOUCHER FOR REASONS AS FOLLOWS:

12/13 BUS FARE NORWICH TO NEW LONDON----------------$0.50

SUSPENDED FOR A SHOWING AS TO WHETHER TAX WAS INCLUDED IN FARE

AND IF SO, IN WHAT AMOUNT. * * *

WITH RESPECT TO SAID ADMINISTRATIVE SUSPENSION, THE RECLAIM VOUCHER STATES THAT THE BUS FARE ,INCLUDES 3 CENTS TAX.'

WHILE THE CLAIM HERE IS NOT BY THE CARRIER IT IS SIGNIFICANT TO NOTE -- AND AS HAVING AN IMPORTANT BEARING UPON THE SITUATION HERE INVOLVED- - THAT THE EVIDENCE WHICH A CARRIER IS REQUIRED TO OBTAIN IN SUPPORT OF A CLAIM FOR EXEMPTION FROM THE TAX IMPOSED BY SECTION 554 OF THE REVENUE ACT OF 1941, 55 STAT. 721, REFERRED TO IN YOUR SUBMISSION, IN A PARTICULAR CASE ON THE BASIS THAT THE TRANSPORTATION IS, IN FACT, BEING FURNISHED TO THE UNITED STATES IS PRESCRIBED BY THE REGULATIONS PROMULGATED BY THE COMMISSIONER OF INTERNAL REVENUE WITH THE APPROVAL OF THE SECRETARY OF THE TREASURY. SEE IN THAT CONNECTION, SECTIONS 130.61 AND 130.62 OF REGULATIONS 42, 1942 EDITION OF THE BUREAU OF INTERNAL REVENUE, PROVIDING IN PERTINENT PART:

TRANSPORTATION AND FACILITIES FURNISHED TO THE UNITED STATES, TO STATES, OR POLITICAL SUBDIVISIONS THEREOF.--- AMOUNTS PAID BY THE UNITED STATES, A STATE OR TERRITORY, OR POLITICAL SUBDIVISION THEREOF, OR THE DISTRICT OF COLUMBIA, FOR THE TRANSPORTATION OF PERSONS OR ACCOMMODATIONS FURNISHED IN CONNECTION THEREWITH, ARE EXEMPT FROM TAX UNDER THIS SECTION.

AMOUNTS PAID FOR TRANSPORTATION OR FACILITIES BY AN OFFICER OR EMPLOYEE OF A GOVERNMENT AGENCY WHO IS TRAVELING ON A MILEAGE OR OTHER ALLOWANCE BASIS ARE EXEMPT FROM TAX WHERE REIMBURSEMENT IS MADE TO SUCH OFFICER OR EMPLOYEE BY THE GOVERNMENT AGENCY.

130.62 EVIDENCE OF RIGHT TO EXEMPTION.--- THE RIGHT TO EXEMPTION UNDER THIS SECTION SHALL BE ESTABLISHED BY THE USE OF (A) GOVERNMENT TRANSPORTATION REQUESTS OR (B) EXEMPTION CERTIFICATES, FORM 731, REVISED.

PARAGRAPH 20 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS PROVIDES:

TRANSPORTATION REQUESTS SHOULD BE USED, WHEN PRACTICABLE, TO OBTAIN ALL OFFICIAL TRANSPORTATION WHERE THE AMOUNT INVOLVED IS $1 OR MORE, BUT SHOULD NOT BE ISSUED TO COMPANIES OTHER THAN TRANSPORTATION LINES COMMONLY RECOGNIZED AS SUCH. * * *

IT IS CLEAR THAT THE TRAVEL REGULATION JUST QUOTED DOES NOT CONTEMPLATE THAT A TRANSPORTATION REQUEST WILL BE USED IN A SITUATION WHERE, AS HERE, THE TRANSPORTATION COST IS LESS THAN $1. NOR DOES IT APPEAR THAT THE USE OF AN EXEMPTION CERTIFICATE--- FORM 731, REVISED, AND NOT STANDARD FORM 1094, REFERRED TO IN YOUR LETTER--- WOULD BE PRACTICAL IN SUCH CASE. THUS, THE CARRIER WOULD, IN SUCH SITUATIONS, BE DEPRIVED OF THE EVIDENCE OF THE RIGHT TO EXEMPTION PROVIDED FOR IN SECTION 130.62 OF THE INTERNAL REVENUE REGULATIONS, SUPRA, SHOULD AN EXEMPTION FROM THE TAX BE REPORTED TO THE INTERNAL REVENUE BUREAU.

HENCE, IN A CASE WHERE NO TRANSPORTATION REQUEST IS USED BY A TRAVELER BECAUSE THE TRANSPORTATION COST INVOLVED IS LESS THAN $1 AND HE DOES NOT EXECUTE AN EXEMPTION CERTIFICATE IN LIEU OF THE PAYMENT OF THE APPLICANT'S TRANSPORTATION TAX, IT APPEARS THAT THE AMOUNT OF THE TAX SO PAID PROPERLY MAY BE CONSIDERED AS A PART OF THE TRANSPORTATION EXPENSE ACTUALLY AND NECESSARILY INCURRED BY THE TRAVELER FOR WHICH REIMBURSEMENT IS AUTHORIZED. 24 COMP. DEC. 277.

ACCORDINGLY, ASSUMING THE SITUATION TO BE AS ABOVE PREMISED, THE VOUCHER, IF OTHERWISE CORRECT AND PROPER, MAY BE CERTIFIED FOR PAYMENT.