B-50169, JUNE 22, 1945, 24 COMP. GEN. 919

B-50169: Jun 22, 1945

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THE LEGAL INCIDENCE OF WHICH IS ON THE VENDOR. MAY BE REIMBURSED TO A CONTRACTOR FURNISHING SERVICE STATION DELIVERIES OF GASOLINE TO THE UNITED STATES UNDER A CONTRACT PROVIDING THAT THE TAX-EXCLUSIVE CONTRACT PRICE BE INCREASED BY THE AMOUNT OF TAXES FOR WHICH EXEMPTION IS NOT GRANTED. WHERE GASOLINE WAS FURNISHED IN SUCH QUANTITIES (300 GALLONS OR LESS) AS NOT TO BE WITHIN THE EXEMPTIVE PROVISIONS OF THE TAXING STATUTE. 1945: I HAVE YOUR LETTER OF MAY 28. INCLUDED IN THE AMOUNT OF THIS VOUCHER IS THE SIX CENTS PER GALLON IDAHO STATE TAX AS PROVIDED IN CHAPTER 163 OF THE 1945 IDAHO SESSIONS LAWS. SECTION 18 (D) OF THIS CHAPTER READS AS FOLLOWS: " SALES OF MOTOR FUELS FOR THE USE OF THE UNITED STATES OF AMERICA IN QUANTITIES IN EXCESS OF 300 GALLONS AND NOT OTHERWISE ARE EXPRESSLY EXEMPTED FROM THE PROVISIONS OF CHAPTER 46.

B-50169, JUNE 22, 1945, 24 COMP. GEN. 919

TAXES - STATE - GASOLINE - PURCHASES IN IDAHO THE GASOLINE TAX IMPOSED BY THE STATE OF IDAHO, THE LEGAL INCIDENCE OF WHICH IS ON THE VENDOR, MAY BE REIMBURSED TO A CONTRACTOR FURNISHING SERVICE STATION DELIVERIES OF GASOLINE TO THE UNITED STATES UNDER A CONTRACT PROVIDING THAT THE TAX-EXCLUSIVE CONTRACT PRICE BE INCREASED BY THE AMOUNT OF TAXES FOR WHICH EXEMPTION IS NOT GRANTED, WHERE GASOLINE WAS FURNISHED IN SUCH QUANTITIES (300 GALLONS OR LESS) AS NOT TO BE WITHIN THE EXEMPTIVE PROVISIONS OF THE TAXING STATUTE; AND, AS THE UNITED STATES HAS NO CLAIM FOR REFUND FROM THE STATE OF THE TAX SO REIMBURSED, EXEMPTION CERTIFICATES NEED NOT BE REQUIRED OF THE CONTRACTOR.

COMPTROLLER GENERAL WARREN TO BEN A. GUDERIAN, DEPARTMENT OF AGRICULTURE, JUNE 22, 1945:

I HAVE YOUR LETTER OF MAY 28, 1945, WITH ENCLOSURES AS FOLLOWS:

THE ATTACHED BUREAU VOUCHER NUMBER 17129 IN FAVOR OF THE CONTINENTAL OIL COMPANY IN THE AMOUNT OF $15.08 HAS BEEN PRESENTED TO THE UNDERSIGNED FOR CERTIFICATION.

INCLUDED IN THE AMOUNT OF THIS VOUCHER IS THE SIX CENTS PER GALLON IDAHO STATE TAX AS PROVIDED IN CHAPTER 163 OF THE 1945 IDAHO SESSIONS LAWS, APPROVED MARCH 16, 1945. SECTION 18 (D) OF THIS CHAPTER READS AS FOLLOWS:

" SALES OF MOTOR FUELS FOR THE USE OF THE UNITED STATES OF AMERICA IN QUANTITIES IN EXCESS OF 300 GALLONS AND NOT OTHERWISE ARE EXPRESSLY EXEMPTED FROM THE PROVISIONS OF CHAPTER 46, 1933 SESSION LAWS AS AMENDED HERETOFORE AND HEREBY.'

THIS EXEMPTION APPLIES TO BOTH SERVICE STATION AND BULK DELIVERIES.

SCHEDULE NO. 1, CLASS 7--- GASOLINE, SPECIAL CONDITIONS, PARAGRAPH 11 (C) (3), GOVERNING CONTRACT NO. TPS-66835 UNDER WHICH THIS PROCUREMENT WAS CONSUMMATED, READS AS FOLLOWS:

"IF ON OR AFTER THE DATE SET FOR THE OPENING OF BIDS THE APPROPRIATE TAX OFFICIAL OF ANY STATE OR LOCAL GOVERNMENT SHOULD AUTHORITATIVELY REFUSE TO ACCEPT, IN LIEU OF THE PAYMENT OF ANY APPLICABLE TAX, EXEMPTION CERTIFICATES ISSUABLE TO THE CONTRACTOR HEREUNDER WITH RESPECT TO SUCH TAX, ON THE GROUNDS THAT ANY OR ALL SALES TO THE GOVERNMENT ARE NOT, AS SUCH, EXEMPT FROM THE TAX, THEN AND IN THAT EVENT THE AMOUNT OTHERWISE PAYABLE TO THE CONTRACTOR WITH RESPECT TO THE SALES AFFECTED THEREBY SHALL BE INCREASED BY THE AMOUNT OF THE TAX. IN CONSIDERATION OF SUCH INCREASE, THE BIDDER AGREES FULLY TO COOPERATE WITH THE GOVERNMENT IN ORDER TO PRESERVE TO THE GOVERNMENT ANY AND ALL RIGHTS TO THE REFUND OF SUCH TAXES, AND TO ASSIST THE GOVERNMENT IN ANY PROCEEDINGS BROUGHT FOR RECOVERY THEREOF BY LITIGATION OR OTHERWISE.'

IN YOUR DECISION B-43591, DATED AUGUST 23, 1944, (24 COMP. GEN. 150) IT WAS RULED THAT IF THE LEGAL INCIDENCE OF THE TAX PRESCRIBED BY EACH OF THOSE STATUTES IS UPON THE VENDOR RATHER THAN UPON THE VENDEE, THERE IS NO REASONABLE BASIS ON WHICH THE UNITED STATES MAY SEEK A REFUND FROM ANY OF THOSE STATES OF THE CHARGE IT IS REQUIRED TO PAY ON ACCOUNT OF THE APPLICABLE TAX IN THE CASE OF SERVICE STATION DELIVERIES OF GASOLINE IN SAID STATES AND THAT NO USEFUL PURPOSE WOULD BE SERVED BY REQUIRING VENDORS TO EXECUTE TAX EXEMPTION CERTIFICATES COVERING SUCH CHARGES.

I AM UNABLE TO DETERMINE IF THE LEGAL INCIDENCE OF THE TAX PRESCRIBED BY THIS STATUTE IS UPON THE VENDOR RATHER THAN THE VENDEE. COPY OF THE STATE OF IDAHO MOTOR FUELS TAX LAW, CHAPTER 46, LAWS OF 1933, AS AMENDED, AND A COPY OF CHAPTER 163 OF THE 1945 IDAHO SESSION LAWS, APPROVED MARCH 16, 1945, ARE ENCLOSED.

YOUR ADVICE IS REQUESTED WHETHER I MAY CERTIFY THIS VOUCHER IN THE FULL AMOUNT, INCLUDING THE IDAHO STATE TAX, IT OTHERWISE BEING CORRECT. YOUR ANSWER IS IN THE AFFIRMATIVE, SHOULD WE REQUIRE THE VENDORS TO EXECUTE TAX EXEMPTION CERTIFICATES COVERING SUCH CHARGES AS PROVIDED IN PARAGRAPH 11 (C) (3) OF CLASS 7 OF GENERAL SCHEDULE OF SUPPLIES.

SINCE WE HAVE A NUMBER OF SIMILAR VOUCHERS ON HAND, YOUR EARLY REPLY WOULD BE APPRECIATED.

IT APPEARS FROM THE INSTANT VOUCHER AND SUPPORTING PAPERS THAT THE GASOLINE HERE INVOLVED WAS PROCURED AT VARIOUS PLACES IN THE STATE OF IDAHO DURING THE PERIOD MARCH 22 TO APRIL 13, 1945, IN QUANTITIES RANGING FROM 2 QUARTS TO 10 GALLONS FOR USE IN CONNECTION WITH THE OPERATION OF GOVERNMENT-OWNED MOTOR VEHICLES BY EMPLOYEES OF THE SOIL CONSERVATION SERVICE OF THE DEPARTMENT OF AGRICULTURE. MOREOVER, WHILE AN EXAMINATION OF THE SUBJECT CONTRACT--- PROVIDING AS IT DOES FOR SERVICE/STATION DELIVERIES OF CERTAIN TYPES OF GASOLINE AND LUBRICATING OIL IN VARIOUS STATES DURING THE FISCAL YEAR 1945 BY THE CONTRACTOR AND ITS AUTHORIZED DEALERS TO " GOVERNMENT-OWNED OR -OPERATED MOTOR VEHICLES"--- DISCLOSES THAT THE PRICES SPECIFIED THEREIN FOR THE GASOLINE PROCURED THEREUNDER IN IDAHO DID NOT INCLUDE AN ITEM REPRESENTING THE STATE TAX AND THAT U.S. TAX EXEMPTION CERTIFICATES WOULD BE FURNISHED WITH RESPECT THERETO, IT IS APPARENT THAT THE CONTRACTUAL PROVISIONS WHICH ARE QUOTED IN YOUR LETTER REQUIRE THE GOVERNMENT TO PAY THE CONTRACTOR A CHARGE EQUIVALENT TO THE TAX, IN ADDITION TO THE SPECIFIED PRICES, IN ALL CASES WHERE THE CONTRACTOR WAS LEGALLY OBLIGATED TO COMPLY WITH THE DEMAND OF THE TAXING AUTHORITIES FOR THE PAYMENT OF THE TAX.

IN THE DECISION OF AUGUST 23, 1944, OF THIS OFFICE TO THE POSTMASTER GENERAL, 24 COMP. GEN. 150, TO WHICH YOU REFER, IT WAS STATED THAT---

* * * THE LANGUAGE USED BY THE SUPREME COURT OF THE UNITED STATES IN ITS DECISION IN THE CASE OF ALABAMA V. KING AND BOOZER, 314 U.S. 1, LEAVES NO ROOM FOR DOUBT THAT A PERSON WHO SELLS SUPPLIES TO THE UNITED STATES IS NOT--- MERELY BECAUSE OF THE IMMUNITY OF THE FEDERAL GOVERNMENT FROM STATE TAXATION--- EXEMPT FROM THE PAYMENT OF AN OTHERWISE APPLICABLE STATE TAX WHERE IT APPEARS THAT THE LEGAL INCIDENCE OF THE TAX RESTS UPON HIM AS THE VENDOR AND NOT UPON THE UNITED STATES AS THE VENDEE. HENCE, PAYMENT PROPERLY MAY BE REQUIRED BY A STATE FROM A VENDOR OF A TAX OF THAT TYPE IN THE CASE OF SUCH SALES TO THE UNITED STATES AS ARE CONSUMMATED WITHIN THE TERRITORIAL JURISDICTION OF THE STATE UNLESS THE STATE LAW OR THE REGULATIONS PROMULGATED BY THE STATE TAXING AUTHORITIES WITH RESPECT THERETO EXCEPT THE TRANSACTIONS FROM THE OPERATION OF THE TAXING STATUTE INVOLVED.

THE IDAHO MOTOR FUELS TAX LAW ( CHAPTER 46, SESSIONS LAWS, 1933, AS AMENDED), PROVIDES, IN PERTINENT PART, THAT---

* * * EACH AND EVERY DEALER, AS DEFINED IN THIS ACT SHALL, NOT LATER THAN THE FIFTEENTH DAY OF EACH CALENDAR MONTH RENDER A STATEMENT TO THE COMMISSIONER OF LAW ENFORCEMENT OF THE STATE OF IDAHO OF ALL MOTOR FUELS SOLD, DISTRIBUTED, AND/OR USED BY HIM OR THEM IN THE STATE OF IDAHO DURING THE PRECEDING CALENDAR MONTH, AND PAY AN EXCISE TAX OF SIX CENTS PER GALLON ON ALL MOTOR FUELS AS SHOWN BY SUCH STATEMENT * * *. AND THERE IS NOTHING IN THE LAW PURPORTING TO REQUIRE DEALERS IN MOTOR FUELS TO INCREASE THE COST OF FUEL SOLD TO THE UNITED STATES OR OTHER PURCHASERS FOR THE PURPOSE OF COLLECTING THE TAX. IN OTHER WORDS, THE TAX IS NOT LAID UPON THE PURCHASERS OF MOTOR FUEL IN IDAHO BUT IS MERELY A PRIVILEGE TAX IMPOSED UPON PERSONS ENGAGING IN THE MOTOR FUEL BUSINESS WITHIN THAT STATE; AND, SINCE THE TAX IS NOT TO BE REGARDED AS BEING PASSED ON, AS SUCH, TO A VENDEE BECAUSE THE PURCHASE PRICE OF THE FUEL INVOLVED IN A PARTICULAR CASE INCLUDES AN AMOUNT REPRESENTING A CHARGE ON ACCOUNT OF THE TAX, IT CANNOT BE SAID THAT THE INCIDENCE OF THE TAX RESTS UPON THE VENDEE.

ALSO, WHILE IT IS UNDERSTOOD THAT PRIOR TO THE TIME THE IDAHO MOTOR FUELS TAX LAW WAS AMENDED BY CHAPTER 163, SESSION LAWS, 1945, APPROVED MARCH 16, 1945, THE TAXING AUTHORITIES OF THAT STATE DID NOT INSIST UPON THE PAYMENT OF THE STATE TAX IN CONNECTION WITH GASOLINE PROCURED FOR GOVERNMENTAL PURPOSES, YET, PROVISIONS OF THE AMENDATORY ACT WHICH ARE SET FORTH IN YOUR LETTER CLEARLY SHOW THAT THE LEGISLATURE OF IDAHO INTENDED THAT THE TAX SHOULD BE NO LESS APPLICABLE IN THE CASE OF GASOLINE SOLD IN QUANTITIES OF 300 GALLONS OR LESS FOR THE USE OF THE UNITED STATES THAN IN THE CASE OF GASOLINE SOLD FOR OTHER PURPOSES. AND THERE IS NO REASON TO SUPPOSE THAT THE TAXING AUTHORITIES OF IDAHO WILL NOT REGARD THE SAID STATUTORY PROVISIONS AS REQUIRING THE COLLECTION BY THEM OF THE APPLICABLE TAX IN CONNECTION WITH SERVICE STATION DELIVERIES OF THE TYPE HERE INVOLVED.

IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT THE CONTRACTOR HERE INVOLVED CANNOT OBTAIN EXEMPTION FROM THE PAYMENT OF THE STATE TAX ON GASOLINE COVERED BY THE INSTANT VOUCHER AND THAT THE GOVERNMENT WOULD NOT BE JUSTIFIED IN REFUSING TO PAY THE CONTRACTOR A CHARGE EQUIVALENT TO THE TAX IN ADDITION TO THE PRICE OTHERWISE FIXED FOR THE GASOLINE.

ACCORDINGLY, YOU ARE ADVISED THAT CERTIFICATION FOR PAYMENT OF THE INSTANT VOUCHER--- WHICH TOGETHER WITH RELATED PAPERS IS RETURNED HEREWITH --- IS AUTHORIZED, IF CORRECT IN OTHER RESPECTS; AND, SINCE NO REASONABLE BASIS IS APPARENT FOR A CLAIM BY THE UNITED STATES FOR REFUND FROM THE STATE OF IDAHO OF THE AMOUNT PAID TO THE CONTRACTOR ON ACCOUNT OF THE TAX, IT WILL NOT BE NECESSARY TO REQUIRE THE CONTRACTOR TO EXECUTE A U.S. TAX EXEMPTION CERTIFICATE WITH RESPECT TO THE TAX.