. . 

AriMTnN 11.lrncxAa 

September 26, 1963 

Honorable Robert S. Calvert Opinion No. C-149 

Comptroller of Public Accounts 

Capitol Station R??n: Whether the Comptroller 

Austin, Texas of Public Accounts can 

legally pay a tax refund 

on special fuels or motor 

fuels used off the highway 

when the quantity so used 

is determined by either of 

Dear Mr. Calvert: the stated methods. 

In your request for an opinion from this department 

relative to refunds of tax on motor fuels and special fuels, 

as defined by statute, you have given~ us two proposed methods 

of keeping records of the amount of fuel used for propelling 

motor vehicles on the public highways and thus rendering same 

subject to taxation, while at the same time allowing~ a refund 

of taxes paid on fuel used for the tax-exempt pur~pose of o,perating loading pumps on the trucks, when the trucks and the power 

take-off for the pumps are powered by the same truck engine which 

draws fuel 'from a sing1.e tank. The accounting methods proposed 

are the following: 

"1. A complete and accurate record of the 

miles traveled by ea~ch vehicle measured by hub 

meters or gpee,dometers approved by ~the C~omptroller, 

and a complete and ac.curate record of the fuel 

delivered into the fuel tank or tanks of the 

vehicle would be kept, from which record the 

quantity of fuel used taxable on the roads and 

highways during the month or other taxable period 

would be computed at one-fourth (l/4) of a gallon 

for each mile so traveled and the multiple quantity 

resulting from such computation would be deducted 

from ,the total quantities delivered to the vehicle 

during the period and the'remainder of such fuel 

would be designated as used in such stationary 

pumping units and a claim for tax refund would be 

filed for such off-highway use." 
. . . 

Hon. liutert 2. Calvert, page 2 (C-149) 

"2. Or a complete and accurate record of the 

miles traveled and fuel delivered to and used by 

each vehicle would be kept as described in paragraph 

one, above, and the operator, acting under the 

direction and supervision of the Comptroller or his 

representatives, would determine by practicable test 

runs the miles that each truck, or class of trucks 

of the same make, weight and horsepower, will travel 

per gallon of motor fuel and each kind of special 

fuels used. Such mileage factor or factors would 

then be used to determine the quantity of fuel used 

taxable on the roads' and highways by each vehicle 

during the month or other taxable period, which 

quantity so determined on the mileage basis aforesaid 

would be deducted from the total quantities delivered 

to the vehicle during the period and the remainder 

of such fuel would be designated as used in such 

stationary pumping units and a claim for tax refund 

would be filed for such off-highwayuse." 

You then asked the following question: 

'Will you, therefore, please 

ment whether it can legally pay a 

fuels or motor fuels used off the 

quantity so used is determined by 

set out in numbered paragraph one 

advise this departtax'refund on special 

highway when the 

either of the methods 

or two above." 

As your question assumes, the issue of the entitlement of the taxpayer to a refund of taxes paid on fuels used 

for off-highway purposes is beyond question. The relevant 

p~ortion of the motor fuel~tax refund statute, Article 9.13, 

Title 122A, Taxation-General, Vernon's Civil Statutes, provides 

in Section (2) as follows: 

who ,;e 

erson (except as hereinafter provided), 

use motor fuel for the nurnose of operating 

or propelline: anv stationarv gasoline engine, motorboat, aircraft., or tractor used for agricultural 

purposes, or for anv other purpose except in a motor 

vehicle operated or intended to be operated upon the 

public highwavs of this State, ,and who shall have 

aaid the tax imposed upon said motor fuel bv this 

Chapter, either-directly or indirectly, shall, when 

such'person has fully complied with all provisions 

of this Article and the rules and regulations promulgated by the Comptroller, be entitled to reimbursement of the tax paid bv him . . ." (Emphasis 

added.) 
. 

Hon Robert S. Calvert, page 3 (C-149,) 

The refund statute pertaining to the special fuels tax is 

equally explicit, providing as follows in Section (1) of 

Article 10.14 of Title 122A, V.C.S.: 

"Except as otherwise provided by Article 10.15 

of this Chapter, any licensed dealer who shall have 

paid the tax imposed by this Chapter upon any liquified 

gas or distillate fuel which has been used or s$lodef;r 

use by such dealer for any purpose other than P P 

g a motor vehicle upon the public hiphwavs of this 

E&&e, . . .and anv licensed user who shall have paid 

said tax upon any liquified gas or distillate fuel 

which has been used bv such user for anv purpose other 

than propelling a motor vehicle upon said public highwavs. mav file a claim for a refund of the tax or 

taxes so paid . . ." (Emphasis added.) 

In the fact situation stated in your opinion request, the fuels 

are used solely for operating pumps for the loading of products 

into and out of tank trucks. ,When used for such purpose, the 

gasoline truck engine connected to the pumping apparatus is a 

"stationary gasoline engine", to use the exact words of Section 

(2) of Article 9.13, above-quoted, and in addition the fuel is 

being used for a purpose other than to propel a motor vehicle 

and would be eligible for tax refund on that basis alone. The 

strict and literal interpretation of the words" . . .use . . . 

in a motor vehicle e . .'I in this statute was rejected by this 

office in Opinion No. O-2381, dated July 25, 1940, wherein it 

was demonstrated the legislature clearly intended to impose 

the tax only upon fuel used on the public highways. Opinion 

No. O-2381 considered several fact situations involving power 

equipment connected to truck engines by power take-off devices, 

including'pumps, post-hole diggers and drilling rigs. Although 

fuel for all these operations was ~drawn from the same tank used 

in propelling the vehicle, the opinion held ~such off-highway 

use to be eligible for refund. 

A truck engine powered by special fuels, used to 

operate power take-off devices as stated above, is certainly 

being used for a "purpose other than propelling a motor vehicle 

upon the public highways" as contemplated by the special fuels 

tax refund statute, ins Section (1) of Article 10.14, quoted 

above. 

Having thus settled the question of the taxpayer's 

entitlement to refund of the tax, we turn now to your question 

concerning the methods which may be used to record, report and 

pay taxes on the fuels used for propelling motor vehicles on 

the public highways and to keep separate those fuels used for 

tax exempt purposes. This is a simple matter, at least in 

theory, when the method approved in Opinion No. ~~-1462, 
Hon. Robert S. Calvert, p a g e 4 (C-149) 

written by this office under date of October 24, 1962, is used, 

which involves use of two separate fuel tanks, one used to 

provide fuel for propelling the vehicle over the highways and 

the other used for operating the power take-off pump for 

loading the truck cargo. However, as your opinion request 

recognized, this method requires expensive additional tanks 

and its accuracy in accounting for the fuel used for the different purposes depends entirely upon the attentiveness of 

hundreds of truck drivers, who are not concerned with the taxes 

involved, each of whom must make eight ($1 valve switches each 

time he loads and unloads the tank truck he is driving. 

Nowhere does the statute expressly contemplate the 

fact situation with which we are confronted in this case. It 

declares in the clearest possible terms that the taxpayer is 

entitled'to his refund, but it does not in this particular instance specify how the accounting shall be made of the fuels 

used for the separate purposes. Should the taxpayer's refund 

Abe denied for lack of an express,statutory command that the 

fuels used for the separate purposes should be accounted for 

in a particular way? We think not. This is not a case in which 

it is a practical impossibility to make a satisfactory accounting 

of the taxable and nontaxable fuels used. To the contrary, your 

opinion request recognized the desirability of the accounting 

methods proposed, and, in fact, the method proposed in your 

.numbered paragraph one'has been expressly approved by the 

legislature for use in another instance in which it is necessary to determine the amount of motor fuel used from a common 

tank for propelling trucks when they are being used at different 

times and places for both taxable and tax exempt purposes. 

Thus, the third paragraph of Section (7) of Article 9.13, Title 

122A, Taxation-General, V.C.S., provides in part: 

"A claimant may account for any part of refund 

motor fuel used upon the public highway, and not 

eligible for tax refund, by one of the following 

methods: . . . (b) Claimant may, by accurately 

measuring the mileage any such vehicle, tractor or 

other conveyance travels upon the public highway, 

deduct from the refund.motor fuel set up in the claim, 

an amount equal to one fourth (l/4) of a gallon for 

each mile or fraction of a mile any such motor vehicle, 

tractor, or other conveyance travels on the public 

highway during the period of the claim, . . ." 

Also, a method of accounting rather similar to the one set 

forth in your numbered paragraph two, was approved by the 

legislature for use by certain suppliers and users in Article 

lO.OS, Title 122A, Taxation-General, V.C.S., which reads as 

follows: 
. . . 

Hon.Robert S. Calwert, page 5 (C-149) 

"In the event the tax herein imposed on special 

fuels imported into this State in the fuel supply tanks 

of motor vehicles and the tax on special fuels used in 

motor vehicles owned or operated by licensed supplier 

or other persons acting as users can be more accurately 

determined on a mileage basis (that is by determining 

and using the total number of miles traveled and the 

total gallons of fuel consumed), or in case it is more 

practicable to so determine the tax, the Comptroller is 

hereby authorized to approve and adopt such basis." 

Once the legislature has declared the taxpayer's 

right to a refund, asit has in this case, it becomes the duty 

of the Comptroller to pay such refund if the taxpayer renders 

a satisfactory accounting. The Comptroller has ample authority 

to require sufficient and satisfactory proof of the claim for 

refund and to promulgate rules and regulations, if necessary, 

regarding the methods to be used in accounting for the fuels 

used for various purposes. Sections (1) (21, (31, and (71, 

of Article 9.13; Article 9.23; Sections Ill, (21, and (4) of 

Article 10.14; and Article 10.21, all in Title 122A, TaxationGeneral, V.C.S., and Opinion No. WW-1020 of this office dated 

March 16, 1961. 

Article 10.08 and Section (7) of Article 9.13, both 

~quoted above, set forth methods for making exactly the same type 

of accounting as is required in this case, i.e., an accounting 

of the amount of fuel used by motor vehicles operating on public 

highways. In both cases the procedure is to determine',the 

amount of fuel used while operating on public highways, then 

allow the taxpayer to claim a refund for the balance. Whether 

the~balance of the fuel, that used for purposes other than propelling the motor vehicle over the public highways, is used 

on private roads or whether it is used to power pumps, posthole diggers, conveyor belts or whatever, the practical problem 

of making a satisfactory accounting is the same. The problem 

is to determine the amount of fuel. su0ject to the tax, pure 

and simple, and the amount of fuel used for other-purposes is 

immaterial. In the absence of a specific statutory directive 

as to the method to be used, the Comptroller will not err in 

allowing motor fuels used one the public hi ways to be accounted 

for by the method set out in Article 9.13 r 7), above-quoted. 

And, since the use of an accounting.method based upon an 

"average miles per gallon" concept was approved by the legislature in Article 10.08, above-quoted, for use in accounting 

for special fuels used upon the public highways, we believe 

it is clearly within the Comptroller's discretion to allow 

the accounting of special fuels used upon the public highways 

by the method. set out in numbered paragraph two, above. 
. . . 

Hon. Robert S. Calvert, page 6 (C-149) 

It may be that either of the proposed methods of 

accounting is satisfactory for both motor fuels and special 

fuels, or that other methods of accounting not yet known or 

contemplated may prove more desirable. In any event, it is 

clearly the Comptroller's prerogative under the above-referenced statutes to require sufficient and satisfactory proof 

of the off-highway use and to promulgate rules and regulations 

concerning accounting methods to be used, not inconsistent 

with the statutes. 

It is, therefore, the opinion of this office that 

you may legally pay a tax refund on motor fuels based upon an 

accounting made in accordance with the procedure set forth in 

numbered paragraph one, above , and that you may legally pay a 

tax refund to a licensed dealer or to a licensed user on 

special fuels based upon an accounting made in accordance 

with the procedure set forth in numbered paragraph two, above, 

under the facts stated. We do not intend to say by this 

opinion that these are the only accounting methods which may 

legally be used; however, in the absence of other statutory 

directives it is perhaps most desirable that methods be used 

which are the same as, or closely analogous to, methods adopted 

by the legislature to account for fuels used on the public 

highways in other instances when the purpose of the accounting 

is the same. 

In discussion of this matter question has been raised 

as to whether refund of the special fuels tax is barred, under 

the facts stated, by the following provisions of Section (3) 

of Article 10.14, Title 122A, Vernon's Civil Statutes: 

"Any dealer or user who shall file claim for 

refund of the tax on any special fuel which has 

been delivered into the fuel supplv tank of a 

motor vehicle, or who shall file any invoice in 

a claim for tax refund upon which anv date. figure. 

signature, or other material information is false - 

or incorrect, shall forfeit his right to the entire 

amount of the refund claim filed." (Emphasis added.) 

The definition of the term "motor vehicle" in Section (5) ' 

of Article 10.02, V. C. S., is indicative of the intent of the 

legislature embodied in Article 10.14 (31, above quoted, for 

the term is defined as follows: 

"'Motor vehicle' means any automobile, truck, pickup, jeep, station wagon, bus or similar vehicle, propelled by a motor or internal combustion engine upon 

the DubliC hirrhwavs; provided, that any tractor, combine, or other vehicle or machine designed primarily 

for use off the public highways shall be deemed to be 
. . . . 

Hon. Robert S. Calvert, page 7 (C-149) 

a motor vehicle when propelled 'or serviced with special 

fuels for propulsion, 

(Emphasis added,) 

upon the public highways." 

A tfuck, or other vehicle, while devoted to off-highway use is 

not a "motor vehicle" within the statutor 

7 

definition. Therefore, it would seem that Article 10.14 (3 is inapplicable to 

the fact situation presented in your opinion request. 

Was it the intent of the legislature to provide by 

Section (3) of Article 10.14 a prohibition against the refund 

of the special fuels tax on such fuels once they are delivered 

into the fuel supply tank of a motor vehicle, assuming for 

purposes of argument the truck under your'facts while devoted 

to off-highway use is a "motor vehicle?" Section (1) of.the 

same Article (quoted on page 3 herein) is obviously the section 

by which the legislature intended to declare who should be en- 

.titled to refunds, while Section (3) is directed at penalizing 

those who file invoices for tax refunds upon which signatures, 

dates, or other information is incorrect. If Section 

were interpreted as prohibiting the refund once the fuels 

are delivered into the fuel supply tank of a motor vehicle, 

it would be directly contrary to and incon,sistent with Section 

(1) wherein its is provided that any licensed dealer or licensed 

user may claim a refund for special fuels devoted to offThe statute should, of course, be construed as 

, not in isolated parts. It is our.duty to harmonize 

the various parts of a statute, whenever possible, keeping in 

mind the intent of the legislature. We cannot believe the 

legislature intended in so oblique a manner to prohibit absolutely the refund of.taxes on special fuels, once delivered 

into the fuel supply tank of a motor vehicle, when in other 

instances (see Article 10.08 quoted above) it permits such 

refunds for use of the same type fuel under similar circumstances 

by others. Nor would there be any logic in giving special fuels 

different tax treatment than motor fuels in this respect. If 

the trucks in question are "motor vehicles" while'.devoted to.'.,offhighway use;',the'n'the 1egislature:must have intended to add aft~er 

the underlined ,portion of Section, (a), abov~e., "and used to propel said vehicl~e upon a public highway" or words,of similar, 

import;for in no other ways can'the statutebe: harmonized‘and 

the legislative intent be given meaning and effect. 

You mention in your opinion request your departmental interpretation of Article 9.13 (7) as applicable to 

this case. Section (7) of Article 9.13 applies only to use of 

motor fuels for highway and non-highway purposes in propelling 

motor vehicles. It has no application to the use of a-motor 

vehicle as a stationary power plant; as in the case at hand. 
. . 

Hon. Robert S. Calvert, page 8 (C-149) 

Reference is also made in your opinion request to 

Opinion No. v-1563 of this office, dated Dec.ember 22, 1952, 

which you construe as authority prohibiting the Comptroller 

from promulgating a rule or regulation allowing tax deductions 

on special fuels used in power units from the same fueltanks 

which propel the motor vehicle over the highways. That 

opinion dealt with the levy of the tax on special fuels when 

such fuels were delivered into the fuel tanks of motor vehicles. 

The basic principles stated in Opinion No. v-1563 are still 

correct. Various provisions of the special fuels tax statute 

still levy the tax at the point of delivery~of the special 

fuel into the fuel tanks of a.motor vehicle, viz, Article 

10.03 (4), Article 10.03 (51, Article 10.13 (2), Article 10.13 

.(J) and Article 10.13 (4). However, since Opinion No. v-1563 

was written in 1952, Article 10.14, permitting the refund of 

special fuels taxes when such fuel is used for any purpose other 

than propelling a motor vehicle upon the public highways of 

.this State, has been added to the statute. Thus, in most instances the tax is still levied when the special fuel is delivered 

into the fuel tanks of a motor vehicle, as required by the provisions of Article 10.03 and Article lo113 cited above, but the 

taxpayer may yet claim a refund of such taxes if the special 

fuel so delivered'is not used to propel the vehicle upon the 

public highways, and the allowance of such refund is in no way 

contrary to the provisions of Articles 10.03 or Article 10.13, 

nor is it inconsistent with the holding of Opinion No. v-1563. 

You also refer ,to a possible inconsistency-in our 

holding in Opinion No. WW-1280, dated March.23, 1962, which 

holds that special fuels delivered into the fuel supply tank 

of a motor vehicle are not subject to tax refunds on the part 

of such fuel used to operate air conditioners installed on such 

vehicles. Although we believe some of the reasoning ~of that 

opinion is open to question, we are not prepared to overrule 

its holding. Air conditioning on a motor vehicle is a part 

of the machinery used while the vehicle is being propelled 

over the highways to provide for the comfort, safety and convenience of the driver and passengers in the vehicle. As 

such it is fairly comparable to the automatic transmission, 

horn, lights, radio, windshield wipers, windshield washers,~ 

heater, cigarette lighter and other power accessories in 

common use today in motor vehicles. Each of these accessories 

drains a certain amount of power off the engine of the motor 

vehicle, in one way or another. The vehicle would obtain more 

mileage without such accessories; therefore, in a sense, the 

amount of fuel used to operate such accessories is not used 

to propel the vehicle over the public highways but ratherto 

shift the gears, sound the horn, light the lights, etc. However, the overall purpose of all these accessories is to contribute to the task of propelling the motor vehicle with its 

cargo over the highway; all are part of a group of separate 
. . , . 

Hon. Robert S. Calvert, page 9 (C-149) 

pieces of machinery put together for a common purpose. A motor 

vehicle is not just an engine resting on a frame connected to 

wheels by a transmission. In this day and age, it includes as 

a matter of course an automatic electric starter, generator, 

power brakes , power steering, etc., and we frankly believe the 

;lirtconditioner is just another accessory on the lengthening 

. 

SUMMARY 

Under the facts stated, the Comptroller may refund 

motor fuel (gasoline) tax and special fuels (butane, 

diesel fuel, etc.) tax when such fuels are used for 

purposes other than propelling motor vehicles over the 

highway even though the fuel is drawn from the same 

fuel supply tank as the fuel used for propelling the 

vehicle over the highway, and the Comptroller may. 

legally authorize in the case of motor fuel taxes, the 

method of accounting for same set out in numbered 

paragraph one, above. In the case of special fuels 

taxes,~ the Comptroller may pay a tax refund to a licensed 

dealer or licensed user and may legally authorize the 

method of accounting for same set out in numbered paragraph two, above. 

Very truly yours, 

WAGGONER CARR 

Attorney General 

BY: +w 

Ernest orten erry 

Assistant Attorney Gener 

EF:sg 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

J. Arthur Sandlin 

Bill Allen 

Robert Smith 

George Gray 

APPROVED FOR THE ATTORNEY GENERAL 

BY: Stanton Stone