B-43366, AUGUST 9, 1944, 24 COMP. GEN. 94

B-43366, AUGUST 9, 1944, 24 COMP. GEN. 94

PASSENGER-CARRYING VEHICLES - PURCHASE PRICE LIMITATIONS THE TERM "COMPLETELY EQUIPPED FOR OPERATION" USED IN SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, IN ESTABLISHING LIMITATIONS ON THE PRICES TO BE PAID FOR PASSENGER VEHICLES, HAS NO DIFFERENT MEANING FROM THAT OF THE IDENTICAL TERM USED IN APPROPRIATION ACTS FOR PRIOR YEARS, SO THAT THE RULES STATED IN 19 COMP. GEN. 988 WITH RESPECT TO THE ACCESSORIES PROPERLY FOR INCLUDING WITHIN THAT TERM ARE APPLICABLE TO VEHICLE PURCHASES SUBJECT TO THE LIMITATIONS PRESCRIBED BY SAID SECTION 202. THE FEDERAL EXCISE TAX ON SALES OF PASSENGER-CARRYING VEHICLES AND ACCESSORIES--- FROM WHICH THE GOVERNMENT IS NO LONGER EXEMPT (SECTION 307 OF THE REVENUE ACT OF 1943/--- MUST BE INCLUDED AS PART OF THE COST OF SUCH A VEHICLE IN APPLYING THE PRICE LIMITATIONS ESTABLISHED BY SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, UNLESS AND UNTIL THE SECRETARY OF THE TREASURY SHALL EXEMPT SUCH SALES FROM THE TAX UNDER AUTHORITY OF SECTION 207 (C) OF SAID REVENUE ACT. 17 COMP. GEN. 580, DISTINGUISHED. CHARGES FOR PACKING NECESSARY IN CONNECTION WITH THE TRANSPORTATION OF PASSENGER VEHICLES PURCHASED SUBJECT TO THE LIMITATIONS ESTABLISHED BY SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, ON PRICES TO BE PAID FOR SUCH VEHICLES CONSTITUTE A PART OF THE COST OF TRANSPORTATION TO BE EXCLUDED IN APPLYING THE LIMITATIONS, WHETHER FOR SHIPMENT IN THE UNITED STATES OR FOR EXPORT, OR BEFORE OR AFTER TITLE PASSES TO THE GOVERNMENT. IN APPLYING THE LIMITATIONS ESTABLISHED BY SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, ON PRICES TO BE PAID FOR PASSENGER VEHICLES, THERE MUST BE INCLUDED AS A PART OF THE GROSS PRICE TO BE PAID BY THE PURCHASING OFFICE ANY SURCHARGE MADE BY THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, FOR SERVICES RENDERED IN CONNECTION WITH THE PROCUREMENT OF THE VEHICLE AND RELATED SERVICES. IN APPLYING THE LIMITATIONS ESTABLISHED BY SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, ON PRICES TO BE PAID FOR PASSENGER VEHICLES, THERE MUST BE INCLUDED IN THE COST OF THE VEHICLE ANY INCREMENT TO THE FACTORY PRICE AUTHORIZED BY THE OFFICE OF PRICE ADMINISTRATION AND PAYABLE TO THE VENDOR. IN APPLYING THE LIMITATIONS ESTABLISHED BY SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, ON PRICES TO BE PAID FOR PASSENGER VEHICLES, THERE MUST BE INCLUDED THE DEALER'S COMMISSION, WHICH IS PAYABLE TO THE VENDOR OUT OF THE GROSS PRICE CHARGED FOR THE VEHICLE. IN APPLYING THE LIMITATIONS ESTABLISHED BY SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, ON PRICES TO BE PAID FOR PASSENGER VEHICLES "COMPLETELY EQUIPPED FOR OPERATION," THERE MUST BE INCLUDED ANY CHARGE FOR CONVERSION TO A RIGHT-HAND DRIVE NECESSARY FOR USE OF THE VEHICLE IN A FOREIGN COUNTRY. THE RULES STATED HEREIN WITH RESPECT TO WHAT ITEMS OF COST INCIDENT TO THE PURCHASE OF PASSENGER VEHICLES ARE TO BE INCLUDED IN APPLYING STATUTORY LIMITATIONS ON THE PRICES TO BE PAID FOR SUCH VEHICLES ARE APPLICABLE TO THE PURCHASE OF A VEHICLE PURSUANT TO AN ALLOCATION FROM THE PRESIDENT'S EMERGENCY FUND CONTAINING THE WORDING "PURCHASE OF ONE AUTOMOBILE AT NOT TO EXCEED $3,000," WITHOUT OTHER QUALIFYING LANGUAGE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF STATE, AUGUST 9, 1944:

I HAVE YOUR LETTER OF JULY 18, 1944 (REFERENCE EF), AS FOLLOWS:

REFERENCE IS MADE TO PUBLIC LAW 358, APPROVED JUNE 27, 1944, ENTITLED THE INDEPENDENT OFFICES APPROPRIATION ACT, 1945, TITLE II, SECTION 202 (A) CONCERNING THE PURCHASE OF MOTOR-PROPELLED PASSENGER CARRYING VEHICLES WHICH READS AS FOLLOWS:

"SEC. 202. UNLESS OTHERWISE SPECIFICALLY PROVIDED, NO APPROPRIATION AVAILABLE FOR THE EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS FOR THE FISCAL YEAR 1945 IN THIS ACT OR ANY OTHER ACT, SHALL BE EXPENDED---

"/A) TO PURCHASE ANY MOTOR-PROPELLED PASSENGER-CARRYING VEHICLE (EXCLUSIVE OF BUSSES, AMBULANCES, AND STATION WAGONS), AT A COST, COMPLETELY EQUIPPED FOR OPERATION, AND INCLUDING THE VALUE OF ANY VEHICLE EXCHANGED, IN EXCESS OF SUCH AMOUNT AS THE SECRETARY OF WAR, IN THE CASE OF THE WAR DEPARTMENT, THE SECRETARY OF THE NAVY, IN THE CASE OF THE NAVY DEPARTMENT, THE COMMISSIONERS, IN CASE OF THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, AND THE DIRECTOR OF THE BUREAU OF THE BUDGET, IN THE CASE OF OTHER ESSENTIAL GOVERNMENT NEEDS, MAY DETERMINE NECESSARY TO OBTAIN SATISFACTORY MOTOR-PROPELLED PASSENGER CARRYING VEHICLES, BUT IN NO EVENT SHALL THE PRICE SO PAID FOR ANY SUCH VEHICLE EXCEED THE MAXIMUM PRICE THEREFOR ESTABLISHED BY THE OFFICE OF PRICE ADMINISTRATION AND IN NO EVENT MORE THAN $1,500, WHICH AMOUNT SHALL BE IN ADDITION TO THE AMOUNT REQUIRED FOR TRANSPORTATION.'

IN ORDER THAT THE ADMINISTRATIVE OFFICERS OF THIS DEPARTMENT MAY INTERPRET THIS LEGISLATION AS IT WILL BE APPLIED BY THE GENERAL ACCOUNTING OFFICE IN THE SETTLEMENT OF PAID VOUCHERS, I SHALL APPRECIATE RECEIVING AT YOUR EARLIEST CONVENIENCE AN ANSWER TO THE FOLLOWING QUESTIONS:

1. WHAT IS MEANT BY THE PHRASE "... COMPLETELY EQUIPPED FOR OPERATION...? " DOES THAT PHRASE INCLUDE EXTRA TIRE/S), TUBE/S) AND WHEELS/S) WHEN MOUNTED IN FENDER WELLS, IN THE TRUNK, OR OTHERWISE AS IS THE COMMON PRACTICE IN THE CASE OF NEW CARS?

2. DOES THE PRICE LIMITATION OF $1,500.00 EXCLUDE THE FOLLOWING ITEMS:

(A) FEDERAL EXCISE TAX ON THE CAR AND ITS REGULAR STANDARD EQUIPMENT.

(B) COST OF SPARE TIRE AND TUBE AND EXCISE TAX THEREON.

(C) COST OF PACKING FOR SHIPMENT:

(1) IN THE UNITED STATES.

(2) FOR EXPORT (EITHER BEFORE OR AFTER DELIVERY OF AUTOMOBILE)

(D) CHARGES MADE BY THE MANUFACTURER OR VENDOR FOR FREIGHT TO POINT OF DELIVERY.

(E) SURCHARGES MADE BY THE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT FOR SERVICES RENDERED IN CONNECTION WITH PROCUREMENT OF THE CAR AND RELATED SERVICES.

(F) INCREMENT CHARGES ON FACTORY COST PRICE OF THE CAR AUTHORIZED BY THE OFFICE OF PRICE ADMINISTRATION TO BE PASSED ON TO THE PURCHASER.

(G) ANY OTHER SIMILAR ITEM FOR WHICH A SEPARATE CHARGE IS MADE BY THE MANUFACTURER OR VENDOR, SUCH AS FOR CONVERSION TO RIGHT-HAND DRIVE, RADIO, HEATER, SEAT COVERS, DEALER'S COMMISSION, ET CETERA.

IN THE CASE OF AN ALLOCATION FROM THE PRESIDENT'S EMERGENCY FUND CONTAINING THE WORDING ,PURCHASE OF ONE AUTOMOBILE AT NOT TO EXCEED $3,000," DO YOUR ANSWERS TO THE ABOVE QUESTIONS PPLY? IF NOT, PLEASE ADVISE ME OF THE DIFFERENT CONDITIONS OR RESTRICTIONS WHICH WOULD APPLY UNDER SUCH LANGUAGE.

WHILE SECTION 202 OF THE INDEPENDENT OFFICES APPROPRIATION ACT FOR 1945, 58 STAT. 384, QUOTED IN YOUR SUBMISSION, MAKES A CHANGE IN THE CEILING PRICE WHICH MAY BE PAID BY THE GOVERNMENT FOR PASSENGER CARRYING VEHICLES FOR THE CURRENT FISCAL YEAR, THE APPLICATION OF THAT PRICE LIMITATION TO VEHICLES "COMPLETELY EQUIPPED FOR OPERATION" MERELY REPEATS LANGUAGE WHICH HAS BEEN EMPLOYED IN THE PRICE LIMITATION ON PASSENGER-CARRYING VEHICLES FOR A NUMBER OF YEARS. IN 19 COMP. GEN. 988, CERTAIN RULES WERE LAID DOWN WITH RESPECT TO THE ACCESSORIES PROPERLY FOR INCLUDING WITHIN THAT TERM AS FOLLOWS (QUOTING FROM THE SYLLABUS):

IN APPLYING THE STATUTORY LIMITATION ON THE PRICE OF AUTOMOBILES PURCHASED FOR THE GOVERNMENT'S USE, THERE MUST BE INCLUDED AS A PART OF THE PRICE OF THE AUTOMOBILE THE COST OF ALL ACCESSORIES REQUIRED FOR THE COMFORT AND CONVENIENCE OF THE PASSENGERS AND THE EFFICIENT OPERATION OF THE VEHICLE AS AN ORDINARY PASSENGER-CARRYING VEHICLE PROVIDED SUCH ACCESSORIES, WHEN IN USE, ARE SUCH AS ORDINARILY ARE PERMANENTLY ATTACHED TO, AND BECOME A PART OF, THE VEHICLE.

THE COST OF AN AUTOMOBILE IN APPLYING THE STATUTORY LIMITATION ON THE PRICE OF PASSENGER-CARRYING VEHICLES PURCHASED FOR THE GOVERNMENT'S USE, BUT SKID CHAINS, FIRE EXTINGUISHERS, SAFETY FLARES, AUTO ROBES, AND REMOVABLE SEAT COVERS ARE NOT REQUIRED TO BE INCLUDED IN THE PRICE LIMITATION.

THE ABOVE ANSWERS, GENERALLY, QUESTION NO. 1.

WITH RESPECT TO QUESTION NO. 2 (A), IT WAS HELD IN DECISION OF JANUARY 20, 1938, 17 COMP. GEN. 580, THAT WHERE A BID TO FURNISH MOTOR PROPELLED PASSENGER-CARRYING VEHICLES INCLUDED THE FEDERAL EXCISE TAX, SHOWED THE AMOUNT THEREOF, AND AGREED TO ITS DEDUCTION, THE AMOUNT OF THE TAX PROPERLY WAS FOR EXCLUSION FROM THE PRICE OF THE VEHICLE WITH REFERENCE TO THE PRICE LIMITATION FIXED BY STATUTE. AT THE TIME THAT DECISION WAS RENDERED SALES TO THE UNITED STATES WERE EXEMPTED FROM THE PAYMENT OF THE EXCISE TAX THEN IMPOSED. SEE SECTION 3442 (3) OF THE INTERNAL REVENUE CODE, 53 STAT. ( PART 1) 416. HOWEVER, BY SECTION 307 (A) OF THE ACT OF FEBRUARY 25, 1944, 58 STAT. 64, SALES TO THE UNITED STATES GOVERNMENT WERE REMOVED FROM THE TAX EXEMPTION PROVISIONS UNLESS EXEMPTION SHOULD BE AUTHORIZED BY THE SECRETARY OF THE TREASURY UNDER THE CONDITIONS SPECIFIED IN SECTION 307 (C) OF THAT ACT, 58 STAT. 66. THIS OFFICE IS NOT INFORMED OF ANY ACTION TAKEN BY THE SECRETARY OF THE TREASURY TO EXEMPT SALES TO THE UNITED STATES OF MOTOR VEHICLES OR ACCESSORIES FROM THE LIABILITY FOR TAX (EXCEPT TIRES AND TUBES SOLD TO THE WAR AND NAVY DEPARTMENTS. SEE 9 FEDERAL REGISTER 5998). ACCORDINGLY, THE FEDERAL TAX ON SALES OF PASSENGER-CARRYING VEHICLES TO THE UNITED STATES NOW MUST BE REGARDED AS CONSTITUTING A PART OF THE PURCHASE PRICE CHARGEABLE AGAINST APPROPRIATED FUNDS UNLESS AND UNTIL THE SECRETARY OF THE TREASURY SHALL EXEMPT SUCH SALES TO THE STATE DEPARTMENT FROM THE FEDERAL TAX.

QUESTION NO. 2 (B) IS ANSWERED, GENERALLY, IN THE ANSWERS TO QUESTIONS NOS. 1 AND 2 (A), SUPRA.

WITH RESPECT TO QUESTION NO. 2 (C), PACKING WOULD BECOME NECESSARY, IF AT ALL, ONLY IN CONNECTION WITH THE TRANSPORTATION OF THE VEHICLE AND, ACCORDINGLY, ANY PACKING CHARGES WOULD CONSTITUTE A PART OF THE COST OF TRANSPORTATION AND, THEREFORE, EXCLUDED FROM THE PRICE LIMITATION WHETHER FOR SHIPMENT IN THE UNITED STATES OR FOR EXPORT, OR BEFORE OR AFTER TITLE PASSES TO THE UNITED STATES.

REFERRING TO QUESTION NO. 2 (D), RELATIVE TO THE COST OF TRANSPORTATION, YOUR ATTENTION IS DIRECTED TO THE LANGUAGE OF THE LIMITATION ITSELF WHICH STATES THAT THE $1,500 "SHALL BE IN ADDITION TO THE AMOUNT REQUIRED FOR TRANSPORTATION.' SEE, ALSO, IN THAT CONNECTION, 17 COMP. GEN. 580, 854; 20 ID. 677; 21 ID. 474.

RELATIVE TO QUESTION NO. 2 (E), ANY SURCHARGE MADE BY THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, UNDER EXISTING LAW AND REGULATIONS, FOR SERVICES RENDERED TO A GOVERNMENT AGENCY IN CONNECTION WITH THE PROCUREMENT OF MOTOR-PROPELLED PASSENGER-CARRYING VEHICLES AND RELATED SERVICES WOULD CONSTITUTE A PART OF THE GROSS PRICE TO BE PAID BY THE PURCHASING OFFICE, AND THEREFORE, WOULD BE INCLUDED WITHIN THE PRICE LIMITATION.

QUESTION NO. 2 (F). ANY INCREMENT TO THE FACTORY COST PRICE AUTHORIZED BY THE OFFICE OF PRICE ADMINISTRATION AND PAYABLE TO THE VENDOR MUST BE INCLUDED IN THE PRICE LIMITATION.

QUESTION NO. 2 (G). THE DEALER'S COMMISSION IS PAYABLE TO THE VENDOR OUT OF THE GROSS PRICE CHARGED FOR THE VEHICLE AND, ACCORDINGLY IS INCLUDED WITHIN THE PRICE LIMITATION. ANY CHARGE FOR CONVERSION TO A RIGHT-HAND DRIVE, WHEN SUCH CONVERSION IS NECESSARY FOR USE OF THE VEHICLE IN A FOREIGN COUNTRY, CONSTITUTES A PART OF THE PRICE OF THE CAR "COMPLETELY EQUIPPED FOR OPERATION" AND, THEREFORE, SUCH CHARGE IS INCLUDED IN THE PRICE LIMITATION. WITH RESPECT TO OTHER ACCESSORIES MENTIONED IN THIS QUESTION, SEE 19 COMP. GEN. 988, SUPRA.

THE QUESTION POSED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER RELATING TO THE PURCHASE OF PASSENGER-CARRYING VEHICLES FROM AN ALLOCATION FROM THE PRESIDENT'S EMERGENCY FUND CONTAINING THE QUOTED WORDS INDICATED IN SAID PARAGRAPH--- WITHOUT OTHER QUALIFYING LANGUAGE- - IS ANSWERED IN THE AFFIRMATIVE.