B-41984, MAY 26, 1944, 23 COMP. GEN. 891

B-41984: May 26, 1944

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IN ADDITION TO THE 8 CENTS PER MILE ALLOWANCE PRESCRIBED BY SECTION 12 OF THE PAY READJUSTMENT ACT OF 1942 TO WHICH THEY ARE ENTITLED WHEN NOT FURNISHED TRANSPORTATION ON GOVERNMENT TRANSPORTATION REQUESTS PURSUANT TO THE ACT OF JUNE 12. PAYMENT OF THE TRANSPORTATION TAX IMPOSED BY SECTION 3469 OF THE INTERNAL REVENUE CODE IS NOT REQUIRED WHEN OFFICERS TRAVELING IN A MILEAGE STATUS ARE FURNISHED TRANSPORTATION ON GOVERNMENT TRANSPORTATION REQUESTS PURSUANT TO THE ACT OF JUNE 12. - FOR WHICH A DEDUCTION OF 3 CENTS PER MILE IS MADE FROM THE OFFICER'S MILEAGE ACCOUNT. IN WHICH YOU REQUEST DECISION WHETHER AN OFFICER OF THE NAVY TRAVELING IN A MILEAGE STATUS MAY BE REIMBURSED FOR TAXES WHICH HE IS REQUIRED TO PAY EITHER ON TRANSPORTATION CHARGES OR PULLMAN ACCOMMODATIONS AND WHETHER.

B-41984, MAY 26, 1944, 23 COMP. GEN. 891

FEDERAL TRANSPORTATION TAX - REIMBURSEMENT TO OFFICERS TRAVELING IN MILEAGE STATUS NAVY OFFICERS TRAVELING IN A MILEAGE STATUS MAY NOT BE REIMBURSED FOR THE TAX IMPOSED BY SECTION 3469 OF THE INTERNAL REVENUE CODE ON AMOUNTS PAID FOR THE TRANSPORTATION OF PERSON, IN ADDITION TO THE 8 CENTS PER MILE ALLOWANCE PRESCRIBED BY SECTION 12 OF THE PAY READJUSTMENT ACT OF 1942 TO WHICH THEY ARE ENTITLED WHEN NOT FURNISHED TRANSPORTATION ON GOVERNMENT TRANSPORTATION REQUESTS PURSUANT TO THE ACT OF JUNE 12, 1906. WHILE, IN VIEW OF THE GOVERNMENT'S EXEMPTION, PAYMENT OF THE TRANSPORTATION TAX IMPOSED BY SECTION 3469 OF THE INTERNAL REVENUE CODE IS NOT REQUIRED WHEN OFFICERS TRAVELING IN A MILEAGE STATUS ARE FURNISHED TRANSPORTATION ON GOVERNMENT TRANSPORTATION REQUESTS PURSUANT TO THE ACT OF JUNE 12, 1906--- FOR WHICH A DEDUCTION OF 3 CENTS PER MILE IS MADE FROM THE OFFICER'S MILEAGE ACCOUNT--- THERE WOULD BE NO LEGAL BASIS FOR AVOIDANCE OF THE TAX ON SLEEPING AND PARLOR CAR ACCOMMODATIONS BY USE OF TRANSPORTATION REQUESTS, IN VIEW OF THE INHIBITION IN THE 1906 ACT AS TO THE FURNISHING OF TRANSPORTATION REQUESTS FOR SUCH ACCOMMODATIONS TO OFFICERS TRAVELING IN A MILEAGE STATUS.

ASSISTANT COMPTROLLER GENERAL YATES TO THE SECRETARY OF THE NAVY, MAY 26, 1944:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 12, 1944, IN WHICH YOU REQUEST DECISION WHETHER AN OFFICER OF THE NAVY TRAVELING IN A MILEAGE STATUS MAY BE REIMBURSED FOR TAXES WHICH HE IS REQUIRED TO PAY EITHER ON TRANSPORTATION CHARGES OR PULLMAN ACCOMMODATIONS AND WHETHER, IF REIMBURSEMENT OF ANY SUCH TAX IS AUTHORIZED, REIMBURSEMENT SHOULD BE LIMITED TO THE TAX ON LOWEST FIRST-CLASS ACCOMMODATIONS AVAILABLE BY THE TRANSPORTATION FACILITY USED OR ON THE TYPE OF ACCOMMODATIONS ACTUALLY SECURED.

SECTION 3469, CHAPTER 30, OF THE INTERNAL REVENUE CODE, AS ADDED BY SECTION 554 OF THE REVENUE ACT OF 1941, 55 STAT. 721, AND AMENDED BY SECTION 609 OF THE REVENUE ACT OF 1942, 56 STAT. 977 (26 U.S.C. 3469 (A) AND (C) ( PROVIDES THAT THERE SHALL BE IMPOSED UPON THE AMOUNT PAID WITHIN THE UNITED STATES FOR TRANSPORTATION OF PERSONS BY RAIL, MOTOR VEHICLE, WATER OR AIR, WITHIN OR WITHOUT THE UNITED STATES, AND FOR SEATING OR SLEEPING ACCOMMODATIONS IN CONNECTION WITH SUCH TRANSPORTATION, A TAX EQUAL TO 10 PERCENTUM OF THE AMOUNT SO PAID. SECTION 3469 (F) (1) PROVIDES THAT SUCH TAX SHALL NOT APPLY, INTER ALIA, TO THE PAYMENT FOR TRANSPORTATION OR FACILITIES FURNISHED TO THE UNITED STATES. AMENDMENTS CONTAINED IN SECTION 307 OF THE REVENUE ACT OF 1943, PUBLIC LAW 235, ENACTED FEBRUARY 25, 1944, 58 STAT. 64, SUCH EXEMPTION, INTER ALIA, IS TO BE TERMINATED JUNE 1, 1944. HOWEVER, SECTION 307 (C) OF THE LATTER ACT, 58 STAT. 66, PROVIDES:

POWER OF SECRETARY OF TREASURY TO AUTHORIZE EXEMPTION.--- NOTWITHSTANDING THE AMENDMENTS MADE BY THIS SECTION, THE SECRETARY OF THE TREASURY MAY AUTHORIZE EXEMPTION FROM THE TAXES IMPOSED BY CHAPTER 19, 29 OR 30 OF THE INTERNAL REVENUE CODE AS TO ANY PARTICULAR ARTICLES OR SERVICES, OR CLASS OF ARTICLES OR SERVICES, TO BE PURCHASED FOR THE EXCLUSIVE USE OF THE UNITED STATES, IF HE DETERMINES THAT THE IMPOSITION OF SUCH TAXES WITH RESPECT TO SUCH ARTICLES OR SERVICES, OR CLASS OF ARTICLES OR SERVICES, WILL CAUSE SUBSTANTIAL BURDEN OR EXPENSE WHICH CAN BE AVOIDED BY GRANTING TAX EXEMPTION AND THAT THE FULL BENEFIT OF SUCH EXEMPTION, IF GRANTED, WILL ACCRUE TO THE UNITED STATES. * * * (ITALICS SUPPLIED).

BY VIRTUE OF THE AUTHORITY VESTED IN THE SECRETARY OF THE TREASURY BY THE SAID SECTION 307 (C) THE ACTING SECRETARY OF THE TREASURY ON APRIL 29, 1944, AUTHORIZED EXEMPTION "FROM THE TAX IMPOSED BY SECTION 3469 OF THE INTERNAL REVENUE CODE (26 U.S.C. 3469) AS TO ANY PAYMENT FOR TRANSPORTATION OF PERSONS FURNISHED TO THE UNITED STATES UPON A UNITED STATES GOVERNMENT TRANSPORTATION REQUEST.' SEE FEDERAL REGISTER, MAY 2, 1944, PAGE 4615.

UNDER THE PROVISIONS OF SECTION 12 OF THE PAY READJUSTMENT ACT OF 1942, 56 STAT. 364, OFFICERS OF THE NAVY, WHEN TRAVELING UNDER COMPETENT ORDERS WITHOUT TROOPS ARE ENTITLED TO RECEIVE A MILEAGE ALLOWANCE AT THE RATE OF 8 CENTS PER MILE, THE DISTANCE TO BE COMPUTED BY THE SHORTEST USUALLY TRAVELED ROUTE AND "EXISTING LAWS PROVIDING FOR THE ISSUE OF TRANSPORTATION REQUESTS TO OFFICERS OF THE ARMY TRAVELING UNDER COMPETENT ORDERS, AND FOR DEDUCTION TO BE MADE FROM MILEAGE ACCOUNTS WHEN TRANSPORTATION IS FURNISHED BY THE UNITED STATES, ARE HEREBY MADE APPLICABLE TO ALL THE SERVICES MENTIONED IN THE TITLE OF THIS ACT," WHICH TITLE INCLUDES THE NAVY. THE ACT OF JUNE 12, 1906, 34 STAT. 240, 246, CONTAINS THE FOLLOWING:

* * * THAT OFFICER WHO SO DESIRE MAY, UPON APPLICATION TO THE QUARTERMASTER'S DEPARTMENT, BE FURNISHED UNDER ORDERS TRANSPORTATION REQUESTS FOR THE ENTIRE JOURNEY BY LAND, EXCLUSIVE OF SLEEPING AND PARLOR CAR ACCOMMODATIONS, OR BY WATER; AND THE TRANSPORTATION SO FURNISHED SHALL, IF TRAVEL WAS PERFORMED UNDER A MILEAGE STATUS, BE A CHARGE AGAINST THE OFFICER'S MILEAGE ACCOUNT, TO BE DEDUCTED AT THE RATE OF THREE CENTS PER MILE BY THE PAYMASTER PAYING THE ACCOUNT, AND OF THE AMOUNT SO DEDUCTED THERE SHALL BE TURNED OVER TO AN AUTHORIZED OFFICER OF THE QUARTERMASTER'S DEPARTMENT THREE CENTS PER MILE FOR TRANSPORTATION FURNISHED, EXCEPT OVER ANY RAILROAD WHICH IS A FREE OR FIFTY PERCENTUM LAND-GRANT RAILROAD, FOR THE CREDIT OF THE APPROPRIATION FOR THE TRANSPORTATION OF THE ARMY AND ITS SUPPLIES: AND PROVIDED FURTHER, THAT WHEN THE ESTABLISHED ROUTE OF TRAVEL SHALL, IN WHOLE OR IN PART, BE OVER THE LINE OF ANY RAILROAD ON WHICH THE TROOPS AND SUPPLIES OF THE UNITED STATES ARE ENTITLED TO BE TRANSPORTED FREE OF CHARGE, OR OVER ANY FIFTY PERCENTUM LAND-GRANT RAILROAD, OFFICERS TRAVELING AS HEREIN PROVIDED FOR SHALL, FOR THE TRAVEL OVER SUCH ROADS, BE FURNISHED WITH TRANSPORTATION REQUESTS, EXCLUSIVE OF SLEEPING AND PARLOR CAR ACCOMMODATIONS, BY THE QUARTERMASTER'S DEPARTMENT: AND PROVIDED FURTHER, THAT WHEN TRANSPORTATION IS FURNISHED BY THE QUARTERMASTER'S DEPARTMENT, OR WHEN THE ESTABLISHED ROUTE OF TRAVEL IS OVER ANY OF THE RAILROADS ABOVE SPECIFIED, THERE SHALL BE DEDUCTED FROM THE OFFICER'S MILEAGE ACCOUNT BY THE PAYMASTER PAYING THE SAME THREE CENTS PER MILE FOR THE DISTANCE FOR WHICH TRANSPORTATION HAS BEEN OR SHOULD HAVE BEEN FURNISHED * * * (ITALICS SUPPLIED).

UNDER THE PROVISIONS OF THE LAWS REFERRED TO, AN OFFICER OF THE NAVY TRAVELING IN A MILEAGE STATUS IS ENTITLED TO MILEAGE AT THE FIXED RATE OF 8 CENTS A MILE FOR THE DISTANCE INVOLVED, COMPUTED OVER THE SHORTEST USUALLY TRAVELED ROUTE, LESS 3 CENTS FOR EACH MILE FOR WHICH THE GOVERNMENT FURNISHED TRANSPORTATION OR FOR EACH MILE FOR WHICH TRANSPORTATION SHOULD HAVE BEEN FURNISHED OVER A LAND-GRANT RAILROAD AS REQUIRED BY THE SAID ACT OF JUNE 12, 1906. THE SAID MILEAGE ALLOWANCE IS PAYABLE WITHOUT REGARD TO THE ACTUAL EXPENSES INCURRED BY THE OFFICER IN PERFORMING THE TRAVEL; THAT IS, AN OFFICER TRAVELING IN A MILEAGE STATUS IS ENTITLED TO PAYMENT AT THE PRESCRIBED RATE PER MILE WHETHER THE ACTUAL EXPENSES INCURRED IN CONNECTION WITH HIS TRAVEL ARE MORE OR LESS THAN SUCH ALLOWANCE. THE ALLOWANCE APPEARS GENERALLY AMPLE TO COVER ALL EXPENSES OF FIRST-CLASS RAIL TRAVEL AND PULLMAN ACCOMMODATIONS, INCLUDING THE TAX HERE INVOLVED, AND, IF AN OFFICER CHOOSES TO TRAVEL LESS EXPENSIVELY OR OTHERWISE TO EFFECT SAVINGS, HE, AND NOT THE GOVERNMENT PROFITS THEREBY. IT SEEMS CLEAR, THEREFORE, THAT THE EXEMPTION OF SUCH OFFICERS AND THAT THE BENEFIT WOULD NOT "ACCRUE TO THE UNITED STATES" AS EXPRESSLY STIPULATED IN SECTION 307 (C) OF THE REVENUE ACT OF 1943, SUPRA. TO REIMBURSE OFFICERS FOR TRANSPORTATION TAXES IN ADDITION TO PAYING THEM THE STATUTORY MILEAGE ALLOWANCE NOT ONLY IS NOT AUTHORIZED BY STATUTE BUT WOULD HAVE THE EFFECT OF EXEMPTING THEM FROM SUCH TAXES APPARENTLY CONTRARY TO THE INTENDMENT OF THE SAID PROVISIONS OF SECTION 307 (C) AND THE EXEMPTION AUTHORIZATION OF THE SECRETARY OF THE TREASURY ISSUED THEREUNDER. IN THOSE CASES WHERE A TRANSPORTATION REQUEST IS FURNISHED FOR THE TRAVEL DIRECTED, THE LAW REQUIRES A DEDUCTION OF 3 CENTS PER MILE FROM THE OFFICER'S MILEAGE ACCOUNT AND SAID DEDUCTION AT THE RATE PRESCRIBED IS REQUIRED IRRESPECTIVE OF WHETHER THE ACTUAL COST TO THE GOVERNMENT FOR THE TRANSPORTATION FURNISHED MAY BE MORE OR LESS THAN 3 CENTS PER MILE. THE GOVERNMENT MUST PAY THE CARRIER IN SUCH CASES, AND, HENCE, THE FULL BENEFIT OF THE EXEMPTION FROM THE TRANSPORTATION TAX WILL ACCRUE TO THE UNITED STATES. PRESUMABLY, IT IS FOR SUCH REASONS THAT THE SECRETARY OF THE TREASURY HAS LIMITED THE EXEMPTION TO PAYMENT FOR TRANSPORTATION FURNISHED UPON GOVERNMENT TRANSPORTATION REQUESTS.

A TAX ON THE AMOUNT PAID FOR TRANSPORTATION OF PERSONS, SIMILAR TO THE TAX IMPOSED BY SECTION 3469 OF THE PRESENT INTERNAL REVENUE CODE, SUPRA, WAS IMPOSED BY SECTION 500 OF THE ACT OF OCTOBER 3, 1917, 40 STAT. 314, AND, WITH RESPECT TO THE TAX THERE LEVIED, IT WAS HELD THAT AN OFFICER OF THE ARMY TRAVELING IN A MILEAGE STATUS AND WHO WAS REQUIRED TO PAY THE TAX WAS NOT ENTITLED TO REIMBURSEMENT THEREOF. SEE 25 COMP. DEC. 473; ID. 532; DECISION DATED APRIL 26, 1919, 89 M.S. COMP. DEC. 634; CF. 24 COMP. DEC. 277; ID. 389. IN THE DECISION OF APRIL 26, 1919, THERE WAS CONSIDERED THE RIGHT OF AN OFFICER OF THE ARMY TRAVELING IN A MILEAGE STATUS TO REIMBURSEMENT OF TAX PAID BY HIM ON RAILROAD FARE AND PULLMAN FARE AND IT WAS STATED:

THE DECISIONS OF THIS OFFICE DATED NOVEMBER 13 AND 17, 1917 (24 COMP. DEC. 277, AND 289), RELATING TO WAR TAX ON TRANSPORTATION IN CASES OF GOVERNMENT OFFICERS OR EMPLOYEES WHOSE TRAVEL IS PAID FOR BY TRANSPORTATION REQUESTS, CASH, OR MILEAGE BOOKS, ARE NOT APPLICABLE TO CASES OF ARMY OFFICERS TRAVELING IN A MILEAGE STATUS.

THE DECISIONS DATED DECEMBER 28, 1918, AND JANUARY 29, 1919 (25 COMP. DEC., 473 AND 532), ARE APPLICABLE AND ARE TO THE EFFECT THAT THE COSTS (INCLUDING THE WAR TAX), INCIDENT TO THE TRAVEL OF AN OFFICER ON DUTY UNDER ORDERS WITHOUT TROOPS, ARE TO BE BORNE BY THE OFFICER HIMSELF AND HE IS NOT ENTITLED TO THE REIMBURSEMENT OF ANY SUCH EXPENSE, THE MILEAGE ALLOWANCE BEING THE ONLY ALLOWANCE TO BE MADE ON ACCOUNT OF SUCH TRAVEL.

ACCORDINGLY, I AM CONSTRAINED TO HOLD THAT THERE WOULD BE NO AUTHORITY TO REIMBURSE OFFICERS OF THE NAVY, IN ADDITION TO PAYMENT OF THE STATUTORY MILEAGE ALLOWANCE, FOR TAXES IMPOSED ON TRANSPORTATION OR PULLMAN ACCOMMODATIONS PROCURED BY THEM WHILE TRAVELING IN A MILEAGE STATUS, AND SINCE, UNDER THE SAID ACT OF JUNE 12, 1906, AN OFFICER TRAVELING IN A MILEAGE STATUS LEGALLY MAY NOT BE FURNISHED TRANSPORTATION REQUESTS FOR SLEEPING AND PARLOR CAR ACCOMMODATIONS, THERE WOULD BE NO LEGAL BASIS FOR THE AVOIDANCE OF THE TAX ON SUCH ACCOMMODATIONS BY THE USE OF TRANSPORTATION REQUESTS. SEE 25 COMP. DEC. 473.