B-86480, JUNE 10, 1949, 28 COMP. GEN. 706

B-86480: Jun 10, 1949

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THE LEGAL INCIDENCE OF WHICH IS ON THE VENDOR. MAY BE PAID TO POST OFFICE DEPARTMENT CONTRACTORS FOR TANK WAGON AND SERVICE STATION DELIVERIES UNDER CONTRACTS PROVIDING EITHER THAT THE STATE TAX IS INCLUDED IN THE CONTRACT PRICE OR THAT THE SPECIFIED PRICE WOULD BE INCREASED BY THE AMOUNT OF THE TAX IN THE EVENT EXEMPTION IS NOT GRANTED. WHERE THE GASOLINE IS USED FOR PURPOSES NOT WITHIN THE EXEMPTION PROVISIONS OF THE TAXING STATUTE. 1949: REFERENCE IS MADE TO YOUR LETTER OF MAY 17. - YOUR DEPARTMENT IS REQUIRED TO PAY FOR TANK WAGON AND SERVICE STATION DELIVERIES OF GASOLINE IN THAT STATE AT A PRICE INCLUSIVE OF THE STATE GASOLINE TAX AND WHETHER THE USE OF TAX EXEMPTION CERTIFICATES MAY BE DISCONTINUED WITH RESPECT TO SUCH TRANSACTIONS.

B-86480, JUNE 10, 1949, 28 COMP. GEN. 706

TAXES - STATE - GASOLINE - PURCHASES IN WASHINGTON GASOLINE TAXES IMPOSED BY THE STATE OF WASHINGTON, THE LEGAL INCIDENCE OF WHICH IS ON THE VENDOR, MAY BE PAID TO POST OFFICE DEPARTMENT CONTRACTORS FOR TANK WAGON AND SERVICE STATION DELIVERIES UNDER CONTRACTS PROVIDING EITHER THAT THE STATE TAX IS INCLUDED IN THE CONTRACT PRICE OR THAT THE SPECIFIED PRICE WOULD BE INCREASED BY THE AMOUNT OF THE TAX IN THE EVENT EXEMPTION IS NOT GRANTED, WHERE THE GASOLINE IS USED FOR PURPOSES NOT WITHIN THE EXEMPTION PROVISIONS OF THE TAXING STATUTE, AND THE USE OF TAX EXEMPTION CERTIFICATES ( STANDARD FORM 1094--- REVISED) MAY BE DISCONTINUED IN WASHINGTON WITH RESPECT TO SUCH PURCHASES.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, JUNE 10, 1949:

REFERENCE IS MADE TO YOUR LETTER OF MAY 17, 1949, WITH ENCLOSURES, REQUESTING DECISION AS TO WHETHER--- IN VIEW OF THE PROVISIONS OF CHAPTER 220, WASHINGTON LAWS OF 1949--- YOUR DEPARTMENT IS REQUIRED TO PAY FOR TANK WAGON AND SERVICE STATION DELIVERIES OF GASOLINE IN THAT STATE AT A PRICE INCLUSIVE OF THE STATE GASOLINE TAX AND WHETHER THE USE OF TAX EXEMPTION CERTIFICATES MAY BE DISCONTINUED WITH RESPECT TO SUCH TRANSACTIONS.

IT IS UNDERSTOOD FROM YOUR SUBMISSION THAT THE GASOLINE REQUIRED IN CONNECTION WITH THE ACTIVITIES OF YOUR DEPARTMENT IN WASHINGTON IS PROCURED UNDER FEDERAL SUPPLY CONTRACTS, CLASS 7, AND CLASSES 7 AND 14, AND IT APPEARS THAT EACH OF SUCH CONTRACTS AS COVERS DELIVERIES IN WASHINGTON EITHER STIPULATES THAT THE STATE TAX IS INCLUDED IN THE CONTRACT PRICE OR PROVIDES, IN EFFECT, THAT THE SPECIFIED PRICE WOULD BE INCREASED BY THE AMOUNT OF THE TAX IN THE EVENT OF A VALID TERMINATION OF THE EXEMPTION THEREFROM THERETOFORE GRANTED IN THE CASE OF SALES OF GASOLINE TO THE UNITED STATES.

THE WASHINGTON TAXING STATUTE HERE INVOLVED IMPOSES UPON DISTRIBUTORS OF MOTOR VEHICLE FUEL AN EXCISE TAX OF $0.065 FOR EACH GALLON OF MOTOR VEHICLE FUEL SOLD, DISTRIBUTED, OR USED BY THEM WITHIN THE STATE AND THERE IS NOTHING IN THE LAW PURPORTING TO REQUIRE THE COLLECTION OF THE TAX FROM THE ULTIMATE VENDEE IN THE CASE OF GASOLINE USED FOR THE PURPOSE OF OPERATING MOTOR VEHICLES. MOREOVER, ALTHOUGH IT IS UNDERSTOOD THE LAW THERETOFORE HAD EXCEPTED ALL MOTOR VEHICLE FUEL SOLD TO THE UNITED STATES FOR OFFICIAL USE FROM THE TAX PRESCRIBED THEREBY, IT APPEARS FROM YOUR SUBMISSION THAT THE PERTINENT PROVISIONS OF CHAPTER 220, WASHINGTON LAWS OF 1949--- WHICH YOU STATE BECAME EFFECTIVE AT 5 O-CLOCK P.M. MARCH 21, 1949--- LIMITED SUCH EXCEPTIONS TO MOTOR VEHICLE FUEL SOLD TO THE UNITED STATES FOR OFFICIAL USE "EXCLUSIVELY IN THE OPERATION OF AIRCRAFT ENGINES.' AND, IT BEING APPARENT THAT THE LEGAL INCIDENCE OF THE TAX DOES NOT REST UPON THE UNITED STATES IN THE CASE OF GASOLINE PURCHASED BY IT WITHIN THE STATE FOR USE IN MOTOR VEHICLES, THERE IS NO ROOM FOR APPLICATION OF THE CONSTITUTIONAL PRINCIPLE IMMUNIZING THE FEDERAL GOVERNMENT FROM STATE TAXATION. SEE, IN THIS CONNECTION, 27 COMP. GEN. 179, AND CASES CITED THEREIN.

ON THE BASIS OF THE FOREGOING, I HAVE TO ADVISE THAT YOUR DEPARTMENT IS REQUIRED TO PAY AN AMOUNT EQUIVALENT TO THE STATE TAX ON TANK WAGON AND SERVICE STATION DELIVERIES OF GASOLINE IN THE STATE OF WASHINGTON UNDER THE CONTRACTS HERE INVOLVED ON AND AFTER 5 O-CLOCK P.M. MARCH 21, 1949, AND THAT THE USE OF TAX EXEMPTION CERTIFICATES--- STANDARD FORM 1094--- REVISED--- WITH RESPECT TO SUCH TRANSACTIONS MAY BE DISCONTINUED.