B-130787, MARCH 27, 1957, 36 COMP. GEN. 681

B-130787, MARCH 27, 1957, 36 COMP. GEN. 681

TAXES - STATE GASOLINE - REIMBURSEMENT TO VETERANS FOR ACTUAL TRAVEL EXPENSES - FEDERAL GOVERNMENT'S ENTITLEMENT TO TAX REFUND A STATE GASOLINE TAX WHICH WAS PAID BY VETERAN BENEFICIARIES WHO PERFORMED AUTHORIZED TRAVEL BY PRIVATELY-OWNED AUTOMOBILE INCIDENT TO MEDICAL EXAMINATION AND TREATMENT, 38 U.S.C. 76, AND WHO WERE REIMBURSED BY VETERANS ADMINISTRATION ON AN ACTUAL EXPENSE BASIS IS NOT A TAX ON THE UNITED STATES NOR DOES REIMBURSEMENT BY THE UNITED STATES TO THESE VETERANS FOR THIS PURPOSE MAKE THEM AGENTS OF THE UNITED STATES OR INVALIDATE THE TAX IN ORDER TO ENTITLE THE VETERANS ADMINISTRATION TO A TAX REFUND.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, MARCH 27, 1957:

YOUR LETTER OF FEBRUARY 15, 1957, REQUESTS OUR ADVICE AS TO WHETHER UNDER THE FACTS HEREINAFTER RELATED THE VETERANS ADMINISTRATION SHOULD PRESS A CLAIM AGAINST THE COMMONWEALTH OF MASSACHUSETTS FOR A REFUND OF GASOLINE TAXES.

THE RECORD DISCLOSES THAT BETWEEN MAY 1955 AND FEBRUARY 1956, A NUMBER OF VETERAN BENEFICIARIES PERFORMED TRAVEL AUTHORIZED BY THE VETERANS ADMINISTRATION ON A REIMBURSABLE BASIS PURSUANT TO PUBLIC LAW 432, 76TH CONGRESS, AS AMENDED, 38 U.S.C. 76, AND IMPLEMENTING EXECUTIVE ORDERS. SOME OF THE VETERANS TRAVELED BY PRIVATELY-OWNED AUTOMOBILES AND WERE REIMBURSED BY THE VETERANS ADMINISTRATION ON AN ACTUAL EXPENSE BASIS. AMONG THE ITEMS OF EXPENSE INCURRED BY THE VETERANS FOR WHICH THEY WERE REIMBURSED WAS THE PURCHASE OF GASOLINE, INCLUDING THE STATE TAX.

THE RECORD ALSO DISCLOSES THAT WHEN THE VETERANS ADMINISTRATION MADE A CLAIM FOR REFUND OF THE STATE TAX, AMOUNTING TO $3.37, THE COMMONWEALTH OF MASSACHUSETTS DENIED THE CLAIM. THE BASIS FOR THE DENIAL IS SET FORTH IN A LETTER OF JULY 31, 1956, FROM THE DIRECTOR OF THE BUREAU OF EXCISES, DEPARTMENT OF CORPORATIONS AND TAXATION, COMMONWEALTH OF MASSACHUSETTS, AS FOLLOWS: * * * THE TITLE DOES NOT ACTUALLY PASS TO THE UNITED STATES GOVERNMENT ON THE FUEL SOLD * * *. THE TRANSACTIONS INVOLVED INDICATE THE PURCHASE BY VARIOUS INDIVIDUALS FOR SUBSEQUENT REIMBURSEMENT BY THE FEDERAL GOVERNMENT. THIS CANNOT BE CONSIDERED AS A SALE TO THE UNITED STATES GOVERNMENT OF THE MOTOR FUEL * * *.

WHILE OUR OFFICE HAS HELD THE UNITED STATES IS NOT SUBJECT TO A STATE GASOLINE TAX WHERE THE LEGAL INCIDENCE OF THE TAX IS ON THE PURCHASER (CF. 21 COMP. GEN. 843; 23 ID. 957; 24 ID. 150), AND EVEN THOUGH AN EXAMINATION OF THE MASSACHUSETTS GASOLINE TAX ACT, CHAPTER 64A OF THE ANNOTATED LAWS OF MASSACHUSETTS, AS AMENDED, AND THE DECISIONS OF THE COURTS ( COMMONWEALTH V. WALLACE, 200 N.E. 406; TEXAS CO. V. BLUE WAY LINES, INC., 93 F.2D 593) LEAVES NO DOUBT BUT THAT THE LEGAL INCIDENCE OF THE MASSACHUSETTS TAX IS ON THE PURCHASER, NEVERTHELESS, WE ARE OF THE OPINION SUCH IS NOT THE CONTROLLING FACTOR IN THE INSTANT CASE.

THOUGH THE STATES HAVE LONG SINCE RECOGNIZED THAT THE FEDERAL GOVERNMENT AND ITS AGENCIES, IN THE ABSENCE OF SPECIFIC AUTHORIZING LEGISLATION BY THE CONGRESS, ARE IMMUNE FROM TAXATION BY STATE AND LOCAL AUTHORITIES (CF. M-CULLOCH V. MARYLAND, 4 WHEAT. 316), OUR OFFICE HAS NO KNOWLEDGE OF ANY FEDERAL STATUTE EXTENDING THE IMMUNITY TO TRANSACTIONS OF THE TYPE HERE INVOLVED.

HERE, THERE WAS NO SALE OF GASOLINE TO THE FEDERAL GOVERNMENT. THE VETERANS WERE THE PURCHASERS AND THE TAX INVOLVED ATTACHED TO THE SALES OF GASOLINE TO THEM. THE GASOLINE NEVER BECAME THE PROPERTY OF THE FEDERAL GOVERNMENT, NOR WAS THE GOVERNMENT A PARTY TO ANY OF THE TRANSACTIONS.

THE FACT THAT THE ECONOMIC BURDEN OF THE TAX IS PASSED ON TO THE UNITED STATES DOES NOT MAKE IT A TAX UPON THE UNITED STATES; AND THE FACT THAT THE FEDERAL GOVERNMENT IS OBLIGATED TO REIMBURSE A PERSON FOR THE ENTIRE AMOUNT OF HIS EXPENSE, INCLUDING A STATE GASOLINE TAX, IN CONNECTION WITH THE CARRYING OUT OF FUNCTIONS, SUCH AS THOSE HERE BEING PERFORMED BY THESE VETERANS, IS NOT ALONE SUFFICIENT TO CONSTITUTE SUCH PERSON AN AGENT OF THE UNITED STATES OR TO INVALIDATE THE TAX. ALABAMA V. KING AND BOOZOR, 314 U.S. 1:CURRY, COMMISSIONER OF REVENUE OF ALABAMA V. UNITED STATES, 314 U.S. 14.

CONSEQUENTLY, THE COMMONWEALTH OF MASSACHUSETTS NEED NOT REFUND THE AMOUNT OF GASOLINE TAX PAID BY THE VETERANS, AND THE CLAIM FOR REFUND SHOULD NOT BE PRESSED BY THE VETERANS ADMINISTRATION.