B-42338, JUNE 16, 1944, 23 COMP. GEN. 957

B-42338, JUNE 16, 1944, 23 COMP. GEN. 957

TAXES - STATE - GASOLINE - REIMBURSEMENT UNDER CONTRACT PROVIDING FOR PRICE "EXCLUSIVE OF ANY AND ALL TAXES" EVEN THOUGH ITS CONTRACT FOR SERVICE STATION DELIVERIES OF GASOLINE TO A POST OFFICE IN MARYLAND PROVIDES THAT THE PRICE STIPULATED THEREIN IS "EXCLUSIVE OF ANY AND ALL TAXES," A CONTRACTOR IS NOT ENTITLED TO REIMBURSEMENT FOR THE MARYLAND GASOLINE TAX--- THE LEGAL INCIDENCE OF WHICH IS ON THE VENDOR AND WHICH VENDORS ARE REQUIRED TO PAY ON GASOLINE SOLD IN THAT STATE TO OR FOR THE USE OF THE UNITED STATES ON AND AFTER APRIL 1, 1944, EXCEPT UNDER CIRCUMSTANCES NOT HERE INVOLVED-- IN THE ABSENCE OF A PROVISION IN THE CONTRACT FOR PAYMENT OF AN AMOUNT EQUIVALENT TO THE TAX IN ADDITION TO THE PRICE OTHERWISE FIXED. A MISAPPREHENSION BY A CONTRACTOR AND A GOVERNMENT CONTRACTING OFFICER AS TO THE LEGAL EFFECT OF THE TERMS OF THE MARYLAND TAXING STATUTE, INSOFAR AS THE QUESTION OF THEIR APPLICABILITY TO GASOLINE SOLD UNDER THE CONTRACT INVOLVED WAS CONCERNED, MUST BE REGARDED AS A MUTUAL MISTAKE OF LAW FOR WHICH THIS OFFICE IS NOT REQUIRED OR AUTHORIZED TO GRANT RELIEF.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, JUNE 16, 1944:

REFERENCE IS MADE TO YOUR UNDATED LETTER, RECEIVED IN THIS OFFICE MAY 29, 1944, AS FOLLOWS:

THERE IS TRANSMITTED A FILE OF PAPERS RELATIVE TO THE IMPOSITION OF THE STATE TAX BY THE STATE OF MARYLAND UPON PURCHASES OF GASOLINE MADE BY AGENCIES OF THE FEDERAL GOVERNMENT, AND AN INVOICE SUBMITTED BY R. E. BARRETT TO THE POSTMASTER AT SILVER SPRING, MARYLAND, UNDER DATE OF MAY 4, IN THE AMOUNT OF $12.64, WHICH IS IN CLAIM FOR MARYLAND, STATE TAXES ON 316 GALLONS OF GASOLINE.

A COPY OF THE CONTRACT WITH R. E. BARRETT WAS TRANSMITTED TO THE POSTAL ACCOUNTS DIVISION BY THE FOURTH ASSISTANT POSTMASTER GENERAL UNDER DATE OF MARCH 30, 1944, SHEET NO. 15.

IN ORDER THAT THE POST OFFICE DEPARTMENT APPROPRIATIONS MAY BE PROPERLY EXPENDED, A DECISION WILL BE APPRECIATED AS TO WHETHER THE POSTMASTER AT SILVER SPRING, MARYLAND, IS AUTHORIZED TO EXPEND GOVERNMENT FUNDS IN PAYMENT OF THE MARYLAND STATE TAX WHERE THE PAYMENT OF SUCH TAX WAS NOT ORIGINALLY MADE A PART OF THE CONTRACT.

AN EARLY REPLY WILL BE APPRECIATED SO THAT THE PROPER ACTION CAN BE TAKEN WITH REGARD TO THE PAYMENT OF STATE TAXES UNDER OTHER CONTRACTS MADE FOR FURNISHING GASOLINE TO POST OFFICES IN THE STATE OF MARYLAND.

THE PARTICULAR CONTRACT TO WHICH YOU REFER CONSISTS OF THE BID DATED MARCH 14, 1944, OF R. E. BARRETT AND THE GOVERNMENT'S ACCEPTANCE THEREOF DATED MARCH 22, 1944. UNDER THE TERMS OF SAID BID R. E. BARRETT AGREED TO FURNISH SERVICE STATION DELIVERIES OF A CERTAIN TYPE OF GASOLINE TO THE UNITED STATES POST OFFICE AT SILVER SPRINGS, MARYLAND, DURING THE QUARTER ENDING JUNE 30, 1944, AT A PRICE OF 13 2/10 CENTS PER GALLON, IT BEING FURTHER STIPULATED THEREIN THAT " THE ABOVE QUOTATION IS EXCLUSIVE OF ANY AND ALL TAXES.'

AMONG THE PAPERS ACCOMPANYING YOUR LETTER WERE COPIES OF CERTAIN REGULATIONS DATED MARCH 18 AND APRIL 15, 1944, OF THE COMPTROLLER OF THE TREASURY OF THE STATE OF MARYLAND RELATIVE TO THE APPLICABILITY OF THE TERMS OF THE MARYLAND MOTOR VEHICLE FUEL TAX LAW IN RESPECT TO MOTOR VEHICLE FUEL SOLD TO AGENCIES OF THE UNITED STATES AND A COPY OF AN OPINION DATED DECEMBER 27, 1943, OF THE ATTORNEY GENERAL OF MARYLAND, WHEREIN THE VIEW IS EXPRESSED THAT THE LEGAL INCIDENCE OF THE TAX PRESCRIBED BY THAT LAW IS ON A DEALER.

THE SAID REGULATIONS REQUIRE THE PAYMENT BY MOTOR VEHICLE FUEL DEALERS IN MARYLAND OF THE TAX IN CONNECTION WITH ALL FUEL SOLD WITHIN THE BOUNDARIES OF THAT STATE ON AND AFTER APRIL 1, 1944, TO AGENCIES OF THE FEDERAL GOVERNMENT EXCEPT (1) WHERE THE FUEL IS SOLD FOR DELIVERY ON A FEDERALLY- OWNED AREA OVER WHICH THE UNITED STATES HAS JURISDICTION, (2) WHERE THE FUEL IS DELIVERED FROM POINTS OUTSIDE THE STATE INTO STORAGE FACILITIES UNDER THE CONTROL OF THE UNITED STATES, AND (3) WHERE THE FUEL IS SOLD TO THE WAR AND NAVY DEPARTMENT AND A CERTIFICATE IS EXECUTED BY THE PROCURING OFFICER THAT THE FUEL MAY NOT "UNDER EXISTING RULES AND PROCEDURES, BE USED IN MOTOR VEHICLES AS DEFINED IN THE MOTOR VEHICLE FUEL TAX LAW; " ALSO, THE SAID REGULATIONS PROVIDE THAT THE UNITED STATE MAY APPLY FOR AND OBTAIN REFUNDS IN THE SAME MANNER AS OTHER CONSUMERS IN CASES WHERE TAX- PAID MOTOR VEHICLE FUEL IS USED FOR NON-TAXABLE PURPOSES.

IT APPEARS FROM AN EXAMINATION OF THE MARYLAND MOTOR VEHICLE FUEL TAX LAW THAT THE LEGAL INCIDENCE OF THE TAX PRESCRIBED THEREBY IS UPON A VENDOR--- THAT IS, A DEALER; AND 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. HENCE, SINCE, AS WAS POINTED OUT IN MY DECISION OF JUNE 15, 1944, TO YOU, B-42427, THE LANGUAGE USED BY THE SUPREME COURT OF THE UNITED STATES IN ITS OPINION IN THE CASE OF ALABAMA V. KIND AND BOOZER, 314 U.S. 1, LEAVES NO ROOM FOR DOUBT THAT A VENDOR 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 A STATE TAX UNLESS THE LEGAL INCIDENCE OF THE TAX IS UPON THE VENDEE (CF. 21 COMP. GEN. 733, 843, 1119), IT MUST BE CONCLUDED THAT PAYMENT OF THE AMOUNT OF THE MARYLAND MOTOR VEHICLE FUEL TAX LEGALLY MAY BE REQUIRED OF A DEALER FURNISHING GASOLINE IN THAT STATE ON OR AFTER APRIL 1, 1944, TO OR FOR THE USE OF THE UNITED STATES, UNLESS THE TRANSACTION IS A SALE OF THE TYPE SPECIFICALLY EXCEPTED FROM THE OPERATION OF THE STATE TAXING STATUTE BY THE ABOVE MENTIONED REGULATIONS. HOWEVER, IT DOES NOT FOLLOW THAT A DEALER IS ENTITLED TO PAYMENT OF AN AMOUNT EQUIVALENT TO THE APPLICABLE TAX IN A CASE WHERE, AS HERE, THE CONTRACT INVOLVED PROVIDES FOR THE FURNISHING OF GASOLINE AT A PRICE EXCLUSIVE OF A CHARGE REPRESENTING A TAX, FOR SUCH A THEORY COMPLETELY IGNORES THE FUNDAMENTAL RULE THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN AND THAT THE FACT THAT SUPERVENING OR UNFORESEEN CAUSES RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, IS NOT SUFFICIENT TO EXCUSE PERFORMANCE OR TO ENTITLE A CONTRACTOR TO ADDITIONAL COMPENSATION. IN OTHER WORDS, A CLAIM BY A GOVERNMENT CONTRACTOR FOR AN AMOUNT REQUIRED TO BE PAID BY HIM ON ACCOUNT OF THE MARYLAND MOTOR VEHICLE FUEL TAX AND WHICH WAS NOT INCLUDED IN HIS QUOTED PRICES IS NO DIFFERENT FROM A CLAIM BY HIM FOR THE PAYMENT OF ANY OTHER ITEM OF EXPENSE OR COST WHICH WAS NOT INCLUDED IN SUCH PRICES. AND, EVEN THOUGH THE MATTER BE VIEWED IN THE LIGHT MOST FAVORABLE TO A DEALER AND IT BE ASSUMED THAT HE AND THE PERSONS WHO ACTED IN BEHALF OF THE GOVERNMENT IN CONNECTION WITH THE EXECUTION OF A PARTICULAR CONTRACT MISAPPREHENDED THE LEGAL EFFECT OF THE TERMS OF THE MARYLAND TAXING STATUTE, INSOFAR AS THE QUESTION OF THEIR APPLICABILITY TO GASOLINE SOLD UNDER THE SAID CONTRACT WAS CONCERNED, IT IS OBVIOUS THAT SUCH MISAPPREHENSION MUST BE REGARDED, AT MOST, AS A MUTUAL MISTAKE OF LAW FOR WHICH THIS OFFICE IS NOT REQUIRED OR AUTHORIZED TO GRANT RELIEF.

THE QUESTION AS TO WHEN AND HOW FAR A COURT WILL GO IN GRANTING RELIEF FROM A MUTUAL MISTAKE OF LAW WAS CLEARLY PRESENTED AND CONSIDERED BY THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF THE BANK OF THE UNITED STATES V. DANIEL, ET AL., 12 PET. 32, WHEREIN THE COURT STATED THE PRINCIPLE INVOLVED IN THAT CASE IN THESE WORDS:

THE MAIN QUESTION ON WHICH RELIEF WAS SOUGHT BY THE BILL; THAT ON WHICH THE DECREE BELOW PROCEEDED, AND ON WHICH THE APPELLEES RELY IN THIS COURT FOR ITS AFFIRMANCE; IS, CAN A COURT OF CHANCERY RELIEVE AGAINST A MISTAKE OF LAW? * * * AND AFTER A DISCUSSION OF THE EVIDENCE, AND A REFERENCE TO THE CONFUSION CREATED BY NUMEROUS AND CONFLICTING DECISIONS, THE COURT REAFFIRMED ITS DECISION IN HUNT V. ROUSMANIERE'S ADM-S., 1 PET. 1, AND CONCLUDED WITH THIS LANGUAGE:

TESTING THE CASE BY THE PRINCIPLE,"THAT A MISTAKE OR IGNORANCE OF THE LAW, FORMS NO GROUND OF RELIEF FROM CONTRACTS FAIRLY ENTERED INTO, WITH A FULL KNOWLEDGE OF THE FACT; " AND UNDER CIRCUMSTANCES REPELLING ALL PRESUMPTIONS OF FRAUD, IMPOSITION, OR UNDUE ADVANTAGE HAVING BEEN TAKEN OF THE PARTY; NONE OF WHICH ARE CHARGEABLE UPON THE APPELLANTS IN THIS CASE; AND THE QUESTION THEN IS, WERE THE COMPLAINANTS ENTITLED TO RELIEF? WHICH WE RESPOND DECIDEDLY IN THE NEGATIVE.

APPLYING THE FOREGOING RULES TO THE CIRCUMSTANCES IN THE INSTANT CASE, AND SINCE THERE IS NOTHING TO INDICATE THAT ANY FRAUD, IMPOSITION, OR UNDUE ADVANTAGE WAS PRACTICED BY THE GOVERNMENT'S REPRESENTATIVES IN CONNECTION WITH THE MATTER, IT MUST BE HELD THAT R. E. BARRETT IS NOT ENTITLED TO BE REIMBURSED FOR THE PAYMENTS REPRESENTED BY HIM TO HAVE BEEN MADE ON ACCOUNT OF THE APPLICABLE STATE TAX ON THE GASOLINE HERE INVOLVED.

ACCORDINGLY, THE QUESTION POSED IN THE PENULTIMATE PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE NEGATIVE AND YOU ARE ADVISED THAT A SIMILAR CONCLUSION IS REQUIRED IN ANY CASE WHERE THE CONTRACT INVOLVED, AS ORIGINALLY EXECUTED, DOES NOT EXPRESSLY PROVIDE FOR THE PAYMENT OF AN AMOUNT EQUIVALENT TO THE MARYLAND MOTOR VEHICLE FUEL TAX IN ADDITION TO THE PRICE OTHERWISE FIXED FOR THE GASOLINE COVERED THEREBY.