Skip to main content

A-23419, A-24086, NOVEMBER 1, 1937, 17 COMP. GEN. 375

A-23419,A-24086 Nov 01, 1937
Jump To:
Skip to Highlights

Highlights

TAXES - STATE - GASOLINE - PURCHASES FROM AND THROUGH RETAILERS - INTERVENING TAX-INCLUSIVE WHOLESALER-RETAILER SALES WHERE A STATE TAX ON GASOLINE IS IMPOSED UPON THE IMPORTER OR WHOLESALE DEALER AND A BONA FIDE SALE INTERVENES BETWEEN THE DEALER WHO PAYS THE TAX AND THE RETAILER WHO SELLS TO THE UNITED STATES. WHERE THE RETAIL DEALER FURNISHES GASOLINE TO GOVERNMENT AGENCIES ON CREDIT CARDS ISSUED BY THE WHOLESALER TO WHOM PAYMENT IS TO BE MADE BY THE GOVERNMENT. THE TRANSACTION IS IN FACT A PURCHASE FROM THE WHOLESALER. - AND IS REQUIRED TO BE MADE FREE OF ANY STATE TAX. IS AS FOLLOWS: WE REFER YOU TO THE SUBJECT FILE (FILE MISC. 08517 (15/-HBC). GOVERNMENT TO WHOM WE HAVE ISSUED CREDIT CARDS HAVE INSISTED THAT THE STATE TAX OF 6 CENTS PER GALLON MUST BE ALLOWED ON DELIVERIES THRU DEALER OPERATED STATIONS IN ALABAMA.

View Decision

A-23419, A-24086, NOVEMBER 1, 1937, 17 COMP. GEN. 375

TAXES - STATE - GASOLINE - PURCHASES FROM AND THROUGH RETAILERS - INTERVENING TAX-INCLUSIVE WHOLESALER-RETAILER SALES WHERE A STATE TAX ON GASOLINE IS IMPOSED UPON THE IMPORTER OR WHOLESALE DEALER AND A BONA FIDE SALE INTERVENES BETWEEN THE DEALER WHO PAYS THE TAX AND THE RETAILER WHO SELLS TO THE UNITED STATES, THE TAX LOSES ITS IDENTITY AS SUCH AND SALES TO THE FEDERAL GOVERNMENT BY SUCH RETAILER ON HIS OWN ACCOUNT DO NOT INVOLVE ANY QUESTION OF STATE TAX, BUT WHERE THE RETAIL DEALER FURNISHES GASOLINE TO GOVERNMENT AGENCIES ON CREDIT CARDS ISSUED BY THE WHOLESALER TO WHOM PAYMENT IS TO BE MADE BY THE GOVERNMENT, THE TRANSACTION IS IN FACT A PURCHASE FROM THE WHOLESALER--- THE RETAILER MERELY ACTING AS THE WHOLESALER'S AGENT--- AND IS REQUIRED TO BE MADE FREE OF ANY STATE TAX.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE GULF REFINING CO., NOVEMBER 1, 1937:

YOUR LETTER OF JULY 8, 1937, IS AS FOLLOWS:

WE REFER YOU TO THE SUBJECT FILE (FILE MISC. 08517 (15/-HBC), YOUR LETTER OF MARCH 23RD, 1937, IN CONNECTION WITH DELIVERIES MADE IN THE STATE OF ALABAMA TO REPRESENTATIVES OF THE U.S. DEPARTMENT OF AGRICULTURE FOREST SERVICE, WASHINGTON, D.C.

WE WOULD LIKE TO GET A DETAIL RULING ON THE EXEMPTION OF STATE TAX IN THE STATE OF ALABAMA. A NUMBER OF DEPARTMENTS OF THE U.S. GOVERNMENT TO WHOM WE HAVE ISSUED CREDIT CARDS HAVE INSISTED THAT THE STATE TAX OF 6 CENTS PER GALLON MUST BE ALLOWED ON DELIVERIES THRU DEALER OPERATED STATIONS IN ALABAMA. THIS WE ARE UNABLE TO DO FOR THE REASON THAT WE CANNOT SECURE REFUNDS OF THE STATE TAX, AS THE ALABAMA STATE TAX COMMISSION WILL NOT ALLOW US TO NEGOTIATE FORM 1094 ON DELIVERIES THRU DEALER OPERATED STATIONS WHERE THE GASOLINE IS PURCHASED TAX PAID.

WILL YOU PLEASE LET US HEAR FROM YOU FULLY ON THIS MATTER SO WE CAN ADVISE THE VARIOUS DEPARTMENTS OF THE GOVERNMENT WHO ARE REQUESTING THAT THE STATE TAX BE ALLOWED ON CERTAIN DELIVERIES?

THE ALABAMA STATE TAX ON GASOLINE IS IMPOSED UPON THE IMPORTER OR WHOLESALE DEALER AND WHEN A BONA FIDE SALE INTERVENES BETWEEN THE DEALER WHO PAYS THE TAX AND THE RETAILER WHO SELLS TO THE UNITED STATES THE TAX LOSES ITS IDENTITY AS SUCH AND SALES TO THE FEDERAL GOVERNMENT BY SUCH RETAILER ON HIS OWN ACCOUNT DO NOT INVOLVE ANY QUESTION OF STATE TAX. LASH'S PRODUCTS CO. V. UNITED STATES, 278 U.S. 175. HOWEVER, WHERE ARRANGEMENTS ARE MADE BETWEEN THE WHOLESALER AND THE RETAILER PURSUANT TO WHICH THE RETAIL DEALER FURNISHES GASOLINE TO GOVERNMENT AGENCIES ON CREDIT CARDS ISSUED BY THE WHOLESALER TO WHOM PAYMENT FOR THE GASOLINE SO FURNISHED IS TO BE MADE BY THE GOVERNMENT, THE TRANSACTION IS IN FACT A PURCHASE BY THE GOVERNMENT FROM THE WHOLESALER WHO WOULD OTHERWISE BE LIABLE FOR THE STATE TAX--- THE RETAIL DEALER MERELY ACTING, WITH RESPECT TO THE TRANSACTION, AS THE AGENT OR REPRESENTATIVE OF THE WHOLESALER--- AND SUCH SALES ARE REQUIRED TO BE MADE FREE OF ANY STATE TAX. SEE PANHANDLE OIL CO. V. MISSISSIPPI, 277 U.S. 218; GRAVES ET AL. V. TEXAS CO., 298 U.S. 293 (AN ALABAMA CASE); 16 COMP. GEN. 553.

GAO Contacts

Office of Public Affairs