*

The Honorable Joseph M. Hood, United States District Judge for the

Eastern District of Kentucky, sitting by designation.

1

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

ELECTRONIC CITATION: 2004 FED App. 0131P (6th Cir.)

File Name: 04a0131p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

AMMEX, INC.,

Plaintiff-Appellant,

v.

UNITED STATES OF AMERICA;

INTERNAL REVENUE SERVICE,

Defendants-Appellees.

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No. 02-2375

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 00-73388—George C. Steeh, District Judge.

Argued: March 12, 2004

Decided and Filed: May 6, 2004 

Before: MERRITT and DAUGHTREY, Circuit Judges;

HOOD, District Judge.*

2 Ammex, Inc. v. United States, et al. No. 02-2375

_________________

COUNSEL

ARGUED: Craig L. John, DYKEMA GOSSE, Bloomfield

Hills, Michigan, for Appellant. Teresa E. McLaughlin, U. S.

DEPARTMENT OF JUSTICE, Washington, D.C., for

Appellees. ON BRIEF: Craig L. John, Mark H. Sutton,

Christopher S. Olson, DYKEMA GOSSE, Bloomfield Hills,

Michigan, for Appellant. Teresa E. McLaughlin, U. S.

DEPARTMENT OF JUSTICE, Washington, D.C., Judith A.

Hagley, U. S. DEPARTMENT OF JUSTICE, TAX

DIVISION, Washington, D.C., for Appellees.

HOOD, D. J., delivered the opinion of the court, in which

DAUGHTREY, J., joined. MERRITT, J. (pp. 11-12),

delivered a separate concurring opinion.

_________________

OPINION

_________________

HOOD, District Judge. Plaintiff-Appellant, Ammex, Inc.

(“Ammex”) sued the United States to recover motor fuel

excise taxes allegedly collected in violation of, inter alia, the

Export Clause of the United States Constitution. Ammex

now appeals the district court’s order granting DefendantsAppellees’ motion for summary judgment on the basis of lack

of standing. For the reasons set forth below, we AFFIRM the

judgment of the district court.

I. FACTUAL AND PROCEDURAL HISTORY

Ammex operates a “sterile” U.S. Customs Class 9 bonded

warehouse, commonly known as a duty-free store, or dutyfree sales enterprise, in Detroit, Michigan. The designation

”sterile” means that the physical design and operation of the

facility guarantee the exportation of products sold therein.

The store is located on West Lafayette Street adjacent to the
No. 02-2375 Ammex, Inc. v. United States, et al. 3

Ambassador Bridge, which connects the United States and

Canada. Customers entering Ammex’s facility have

necessarily proceeded beyond the “point of no return” and

must exit the United States.

As a duty-free sales enterprise, Ammex is permitted to sell

for export certain goods “duty-free.” These duty-free goods

are sold to customers who transport them directly to Canada

after leaving Ammex’s store. At issue in the district court

case was whether Ammex could sell gasoline and diesel fuel

on a duty-free basis.

Ammex purchased the fuel in question with the intention of

selling it for export from its duty-free store. This store has an

Automatic Tank Gauging system, whereby its daily fuel

needs are automatically recorded and transmitted to its

purchasing agent, Fleet Fuel, LLC (“Fleet Fuel”). Based on

the data received from that system, Fleet Fuel prepares

purchase orders on behalf of Ammex. During the periods at

issue, Ammex purchased both gasoline and diesel fuel from

several local suppliers, including BP Oil Co., Atlas Oil Co.,

Viking Oil, Peerless Distributing Co., and Mooney Oil Co.

Because of the duty-free nature of its operations, Ammex

requested to purchase the fuel free of federal excise tax. The

suppliers, however, as a condition of Ammex’s purchase of

the fuel, required payment of federal excise taxes at the time

of purchase. These taxes were imposed at the time the fuel

was removed from the fuel terminal, known as the terminal

rack, for delivery to Ammex’s duty-free store. This practice

is consistent with I.R.C. § 4081, which places the legal

incidence of the excise tax at this point in the chain of sales

transactions. After removing the fuel from the terminal rack,

third-party carriers delivered the fuel directly to Ammex’s

duty-free facility and unloaded it into Ammex’s fuel

dispensing tanks. Ammex’s purchasing agent remitted

payment for the fuel within ten days of its delivery to

Ammex’s fuel storage facility. After delivery, Ammex sold

4 Ammex, Inc. v. United States, et al. No. 02-2375

the fuel to customers who were necessarily required to take it

into Canada. 

The Export Clause of the United States Constitution

prohibits the imposition of any federal tax on duty-free

merchandise. This constitutional proscription is confirmed by

federal customs law. See, 19 U.S.C. § 1555(b)(3)(C), (8)(E).

Ammex also cites to several provisions of the Internal

Revenue Code in support of its claim for a refund of the tax

paid on the gasoline and diesel fuel at issue. 

In part, Ammex relies on a letter ruling it received from the

U.S. Customs Service Port Director for Detroit dated

September 5, 2000. In that letter, Ammex was granted

permission to expand its Class 9 duty-free warehouse

operation to include the sale of gasoline and diesel fuel. That

letter ruling, however, was revoked in a notice-and-comment

ruling letter and explanatory note dated November 1, 2001.

The basis of the revocation was that only fuel on which

neither duty nor tax has been assessed can qualify as duty-free

fuel under 19 U.S.C. § 1555(b)(8)(E), and the fuel sold by

Ammex had been assessed a federal excise tax. Customs was

enjoined from effectuating its revocation because of a

temporary restraining order (“TRO”) issued by Court of

International Trade Judge Evan J. Wallach on January 23,

2002. That TRO was subsequently dissolved by Judge

Wallach on February 22, 2002. 

Asserting that taxation of the fuel violated the Export

Clause of the Constitution, Ammex made refund claims with

respect to gasoline and diesel fuel for each of the tax periods

at issue. The total refund requested was $647,494 plus

interest. The IRS disallowed Plaintiff’s claims for two

reasons: first, Plaintiff did not establish that the gasoline and

diesel fuel sold constituted export sales, and second, Ammex

did not establish that it was the proper party to seek a refund.

On February 3, 2000, Ammex filed its complaint against

the United States and the Internal Revenue Service, seeking
No. 02-2375 Ammex, Inc. v. United States, et al. 5

recovery of fuel tax of $647,494.00, plus interest for quarterly

tax periods ending March 31, 1999, and June 30, 1999.

Ammex based its claims on the Export Clause of the United

States Constitution, art. I, § 9, cl. 5, and I.R.C. §§ 4221, 6421,

and 6427. 

On November 19, 2001, Ammex filed a motion for

summary judgment. On November 20, 2001, theGovernment

filed its own motion for summary judgment. The district

court heard the cross-motions for summary judgment on

February 7, 2002. On July 31, 2002, the district court granted

the Government’s motion for summary judgment and denied

Ammex’s, holding that Ammex lacked standing to seek a

refund of fuel taxes because it could not establish “an injury

in fact caused by defendant.” The court did not reach the

merits of the Export Clause claim. Judgment was entered on

August 1, 2002. 

On August 14, 2002, Ammex filed a motion for

reconsideration; the motion was denied by the district court

on October 22, 2002. The instant appeal followed.

II. STANDARD OF REVIEW

This Court reviews a district court’s grant of summary

judgment de novo. See Upsher v. Grosse Pointe Public

School System, 285 F.3d 448, 451, (6th Cir. 2002). The

constitutional and statutory interpretation issues presented in

this case are questions of law, also subject to de novo review.

See Johnson v. Economic Dev. Corp., 241 F.3d 501, 509 (6th

Cir. 2001). 

6 Ammex, Inc. v. United States, et al. No. 02-2375

III. DISCUSSION

A. Standing under the Export Clause

The “case or controversy” limitation of Article III of the

Constitution requires that “a federal court act only to redress

injury that fairly can be traced to the challenged action of the

defendant, and not injury that results from the independent

action of some third party not before the Court.” Simon v. E.

Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976). The

district court’s conclusion that Ammex had no standing was

based, in part, upon the fact that it was not the Government

that collected the tax from Plaintiff, but rather Plaintiff’s

suppliers. In other words, it was the action of a third party

(the suppliers), as opposed to the Defendant (the

Government), that caused Plaintiff’s alleged injury.

In order to satisfy the standing requirements imposed by

Article III of the United States Constitution, 

A plaintiff must have suffered some actual or threatened

injury due to the alleged illegal conduct of the defendant;

the injury must be ‘fairly traceable’ to the challenged

action; and there must be a substantial likelihood that the

relief requested will redress or prevent the plaintiff’s

injury.

Coyne v. American Tobacco Company, 183 F.3d 488, 494

(6th Cir. 1999) (citing Valley Forge Christian College v.

Americans United for Separation of Church & State, Inc., 454

U.S. 464, 473 (1982)). Plaintiff claims that (1) it suffered an

economic injury in fact by the Government’s imposition of

the challenged excise tax, (2) since the Government imposed

this tax, its injury is fairly traceable to the Government, and

(3) by reimbursing Ammex for the taxes paid, its injury will

be redressed. 

Although the Government did impose an excise tax on the

fuel that Ammex purchased and later sold at its “duty-free
No. 02-2375 Ammex, Inc. v. United States, et al. 7

1

The tax was imposed on Ammex’s suppliers pursuant to 26 U.S.C.

§ 4081(a)(1)(A)(ii) because it was the suppliers that removed taxable fuel

from the terminal.

facility,” that tax was not assessed against Ammex. Instead,

the tax was imposed on Ammex’s suppliers who, in turn,

added the amount of the tax to the wholesale price of the fuel

Ammex purchased.1 As noted by the district court, “The tax

burden at issue here is that of Ammex’s suppliers, and not

Ammex.” Therefore, Ammex did not pay the challenged

excise tax to the Government (nor was such a tax assessed

against it), but instead paid a tax-included price to its

suppliers. It was in the discretion of Ammex’s suppliers to

charge Ammex for the challenged tax amount. Consequently,

any alleged injury suffered by Plaintiff in the form of

increased fuel costs was not occasioned by the Government.

It is difficult to see how, “[i]f the defendant did not lay,

assess, exact, or otherwise collect from plaintiff any federal

excise taxes on the gasoline and diesel fuel during the periods

at issue...,” Plaintiff can proceed under this theory. Ammex

Inc. v. United States, No. 99-338T (Court of Federal Claims,

April 10, 2002) at p. 12. Without an injury-in-fact, caused by

the Government, we hold that Ammex does not have standing

to pursue its claim based on the Export Clause. 

B. Fuel Sold “For Export”

26 U.S.C. § 6421(c) provides that if gasoline is sold to any

person for certain exempt purposes set forth in § 4221(a)(2)-

(5), such person is to be paid an amount equal to the tax

without interest. As relevant here, § 4221(a)(2) lists as an

exempt purpose, a sale “for export, or for resale by the

purchaser to a second purchaser for export.” The district

court determined that Ammex was not entitled to recover

payments under § 6421(c) because, according to longstanding

8 Ammex, Inc. v. United States, et al. No. 02-2375

2

The district court partially relied on Revenue Ruling 69-150,

specifically holding that it was entitled to Chevron deference. While

Chevron deference may not be the appropriate level of deference to which

revenue rulings are entitled, Ruling 69-150 is a long-standing and highly

persuasive precedent. Reasonable agency interpretations carry “at least

some added persuasive force” where Chevron is inapplicable.

Metropolitan Stevedore Co. v. Rambo, 521 U.S. 121, 136 (1997). 

administrative practice,2 the fuel sold by Ammex was not sold

for export within the meaning of the statute. 

Because the excise tax provisions of the Code do not define

“export,” extrinsic aids for construction may be relied on in

interpreting the meaning of export for purposes of § 6421(c)

and § 4221(a)(2). For more than 30 years, the IRS has taken

the position that delivery of fuel into the fuel supply tank of

a motor vehicle is use of that fuel, and that the subsequent

movement of the vehicle into a foreign country does not

constitute exportation of that fuel for purposes of motor fuel

excise taxes. Revenue Ruling 69-150.

Whether or not Chevron deference is appropriately applied

here, obviously some level of deference to the agency ruling

is due. As the Supreme Court pointed out in United States v.

Mead Corp., 533 U.S. 218, 234 (2001), even though an

agency’s interpretation is not entitled to Chevron deference,

such an interpretation may merit some deference whatever its

form, given the specialized experience, broader investigations

and information available to the agency, and given the value

of uniformity in its administrative and judicial understandings

of what national law requires. Indeed, the Court in Mead

reaffirmed the holding of Skidmore v. Swift & Co., 323 U.S.

134 (1944), that “[t]he weight [accorded to an administrative]

judgment in a particular case will depend upon the

thoroughness evident in its consideration, the validity of its

reasoning, its consistency with earlier and later

pronouncements, and all those factors which give it power to

persuade, if lacking power to control.” Mead, 533 U.S. at 228

(quoting Skidmore, 323 U.S at 140).
No. 02-2375 Ammex, Inc. v. United States, et al. 9

3

In Aeroquip-Vickers, this Court reversed the Tax Court’s failure to

defer to a revenue ruling, holding that the Tax Court had

“mischaracterized the degree of deference accorded to revenue rulings...”

Aeroquip-Vickers, Inc. Commissioner, No. 01-2741 (Oct. 20, 2003). This

Court stated that the revenue ruling at issue was not entitled to Chevron

deference. Id. Howeve r, by examining the factors set out in Skidmore,

the Court concluded that “some deference to Revenue Rul[ing] 82-20 is

proper.” Id. at 14. 

Consideration of the above factors dictates that at least

some level of deference is due Revenue Ruling 69-150.3

Revenue rulings are written and reviewed at the same level of

the IRS and the Treasury Department as are Treasury

regulations, demonstrating that a “central board or office”

accords a great “degree of ...care” to their issuance. Mead,

533 U.S. at 228, 236. Of course, the IRS possesses “relative

expertness” in the application of the Code to particular facts,

given the technical complexity of federal tax law. See id.

Additionally, the fact that the IRS has left Revenue Ruling

69-159 virtually unchanged for over three decades

demonstrates the soundness of the decision there made.

Finally, Ammex has failed to identify any infirmity in this

longstanding and sensible interpretation of the statutory

scheme.

Given the logical and long-standing agency interpretation

of a statue by the department charged with its administration,

we believe Revenue Ruling 69-150 has the power to persuade

and should be followed in a case such as this. Hence, we

conclude that the district court did not err in holding that the

fuel sold by Ammex was not “for export” within the meaning

of § 4221(a)(2) and § 6421(c).

C. Ammex as an “Exporter”

I.R.C. § 6416(c) allows an exporter of motor fuel to recover

an illegally collected tax. The district court found that

Ammex, a duty-free sales enterprise, was not an exporter but,

instead a retailer that facilitated exportation by the individual

10 Ammex, Inc. v. United States, et al. No. 02-2375

retail customers who departed the country. Ammex submits

that its status as a “duty-free sales enterprise” means that,

although it is not a carrier of fuel into Canada, it must be

considered an “exporter” because its “sole business is

arranging for merchandise to be sent to Canada by selling it

for assured exportation.” 

The definition of “duty-free sales enterprise” demonstrates

that Ammex is not an exporter. Congress has defined a

“duty-free sales enterprise” to mean “a person that sells, for

use outside the customs territory, duty-free merchandise that

is delivered from a bonded warehouse to an airport or other

exit point for exportation by, or on behalf of, individuals

departing the customs territory.” 19 U.S.C § 1555(b)(8)(D);

see also 19 C.F.R. § 19.35(a) (“A class 9 warehouse (dutyfree store) may be established for exportation of conditionally

duty-free merchandise by individuals...”).

According to the definition, a duty-free store does not itself

export, but rather sells duty-free goods for export by someone

else (i.e., a customer). Thus, Ammex’s assertion that it is an

“exporter” is belied by the definition itself. The district court

correctly held that Ammex was not an “exporter” under 26

U.S.C. § 6416(c).

D. Constitutionality of I.R.C. § 4081

Because Ammex lacks standing to raise the Export Clause

claim, this Court need not decide whether § 4081 is

unconstitutional with respect to fuel sold to a duty-free

enterprise.

IV. CONCLUSION

For the above mentioned reasons, we AFFIRM the

judgment of the district court.
No. 02-2375 Ammex, Inc. v. United States, et al. 11

_________________

CONCURRENCE

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MERRITT, Circuit Judge, concurring. Although I agree

with the result reached in the majority opinion, I have serious

doubts about the conclusion that Ammex does not have

standing to bring this claim under the Export Clause of the

Constitution. It seems to me that for the purposes of standing,

Ammex alleges an injury that is fairly traceable to the

Government. The fact that Ammex paid the tax to the

wholesaler rather than to the Government does not mean that

the higher price it paid cannot be easily traced to the

Government’s imposition of the tax for the purposes of

standing. If the gas were sold by Ammex in a separate

container and not mixed with the gas in the purchaser’s tank

before entry into Canada, it would presumably count as an

“export” and there would be no question that Ammex has

standing. I do not think that standing should turn on issues

that go to the merits of the claim like the question of whether

the gas is mixed in the fuel tank or sold in a separate

container. Moreover, I do not understand how we can reach

the merits of the statutory claim — implicitly holding that

when pursued through that avenue the injury is fairly

traceable to the Government — yet hold that Article III’s

standing requirements prevent us from hearing a

constitutional claim for the same injury caused in exactly the

same way. This seems a distinction without a difference that

should not encumber the constitutional law of standing to

litigate.

As for the merits of the Constitutional claim, I would

interpret the meaning of “export” in the Constitution the same

way the majority interprets it for the statutory claim, and

uphold the judgment on those grounds. Ammex is not an

“exporter” under the Constitution anymore than it is under the

statute. When it pours gas into the tank of a car, mixing it

with what is there, it is no more of an exporter than the gas

12 Ammex, Inc. v. United States, et al. No. 02-2375

station which does the same thing a few blocks before

reaching the bridge.