. .

AriMTnN 11.lrncxAa September 26, 1963

Honorable Robert S. Calvert Opinion No. C-149 Comptroller of PublicAccounts Capitol Station R??n: Whether the Comptroller Austin, Texas of Public Accounts can legally pay a tax refund
on special fuels ormotor fuels used off the highway when the quantity so used is determinedby either of DearMr. Calvert: the statedmethods.

Inyour request for an opinion from this department relative to refunds of tax onmotor fuels and special fuels,
as defined by statute,you have given~ us two proposedmethods 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~poseof o,perating loading pumps on the trucks,when the trucks and the power take-off for the pumps are powered by the same truck enginewhich draws fuel 'froma sing1.e tank. The accounting methods proposed
are the following:

"1. A complete and accurate record of the miles traveled by ea~ch vehiclemeasured by hub meters or gpee,dometersapproved by~theC~omptroller, and a complete and ac.curate record of the fuel delivered into the fuel tank or tanks of the vehiclewould be kept, fromwhich 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 eachmile so traveled and themultiple quantity resulting from such computationwould be deducted from ,thetotal 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 completeand accurate record of the miles traveledand fuel delivered to and used by each vehiclewould be kept as described in paragraph one, above, and the operator, acting under the directionand supervisionof the Comptroller or his representatives,would determine by practicabletest runs themiles that each truck, or class of trucks of the samemake, weight and horsepower,will travel per gallon ofmotor fuel and eachkind of special fuels used. Suchmileage factor or factorswould then be used to determinethe quantity of fuel used taxable on the roads' and highways by each vehicle during themonth or other taxableperiod,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 fuelwould be designatedas used in such stationarypumping units and a claim for tax refund would be filed for such off-highwayuse."

You then asked the following question:

'Willyou, therefore,please ment whether it can legally pay a fuels ormotor fuels used off the quantity so used is determinedby set out in numbered paragraph one advise this departtax'refund on special highwaywhen 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-highwaypurposes is beyond question. The relevant p~ortion

of themotor fuel~tax refund statute,Article 9.13, Title 122A, Taxation-General,Vernon'sCivil Statutes,provides in Section (2)as follows:

who ,;e erson (exceptas hereinafterprovided),

use motor fuel for the nurnose of operating
or propelline:

anv stationarvgasoline 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,,andwho shall have aaid the tax imposedupon saidmotor fuel bv this Chapter, either-directlyor indirectly, shall,when such'personhas fully compliedwith all provisions of thisArticle 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 statutepertaining to the special fuels tax is equally explicit,providing as follows in Section (1) of Article 10.14 of Title 122A, V.C.S.:

"Exceptas otherwise provided by Article 10.15 of this Chapter, any licensed dealerwho shall have paid the tax imposed by this Chapter upon any liquified gas or distillate fuelwhich 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,

. . .andanv 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 arefund of the tax or taxes so paid

. . ." (Emphasisadded.)

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. ,Whenused for such purpose, the gasoline truck engine connected to the pumping apparatus is a "stationarygasoline engine", to use the exactwords 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 OpinionNo. 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 involvingpower equipment connected to truck engines by power take-off devices, including'pumps,post-hole diggers and drilling rigs. Although fuel for all these operationswas~drawnfrom the same tank used in propelling the vehicle, the opinion held~suchoff-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, insSection (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 propellingmotor vehicles on the public highways and to keep separate those fuels used for tax exemptpurposes. This is a simplematter, at least in theory, when the method approved in Opinion No. 

### ~~-1462,Hon. Robert S. Calvert,p g a e 4 (C-149)

written by this officeunder date of October 24, 1962, is used, which involvesuse of two separatefuel tanks, one used to provide fuel for propellingthe vehicle over the highwaysand the other used for operatingthe power take-off pump for loading the truck cargo. However,as your opinion request recognized, thismethod requires expensiveadditional tanks and its accuracy in accountingfor the fuel used for the different purposesdepends entirelyupon the attentivenessof hundreds of truck drivers,who are not concernedwith the taxes involved, each ofwhom must make eight ($1valve switches each time he loads and unloads the tank truck he is driving.

Nowheredoes the statute expressly contemplatethe fact situationwith which we are confronted in this case. It declares in the clearestpossibleterms that the taxpayer is entitled'tohis refund,but it does not in this particularinstancespecify how the accounting shall bemade of the fuels used for the separatepurposes. Should the taxpayer's refund Abedenied for lack of an express,statutorycommand that the fuels used for the separatepurposes should be accounted for in a particularway? We think not. This is not a case inwhich it is a practical impossibilityto make a satisfactoryaccounting of the taxable andnontaxable fuels used. To the contrary,your opinion request recognizedthe desirability of the accounting methods proposed,and, in fact, the method proposed inyour .numberedparagraphone'hasbeen expressly approved by the legislature for use in another instance inwhich it is necessary to determinethe amount ofmotor fuel used from a common tank for propellingtruckswhen 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 claimantmay 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)Claimantmay, by accurately measuring themileage any such vehicle, tractor or other conveyancetravels 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 eachmile or fraction of a mile any suchmotor vehicle, tractor, or other conveyancetravels on the public highway during the period of the claim,

. . ."
Also, a method of accounting rather similar to the one set forth in your numberedparagraph 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 ofmotor vehicles and the tax on special fuels used in
motor vehicles owned or operated by licensed supplier
or other persons acting as users can bemore accurately determined on a mileage basis (that is by determining and using the total number ofmiles traveled and the total gallons of fuel consumed), or in case it is more practicableto 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 satisfactoryaccounting. 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 themethods 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 OpinionNo. WW-1020 of this office dated March 16, 1961.

Article 10.08 and Section (7) of Article 

### 9.13,both ~quotedabove, set forthmethods 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 motorvehicles 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 practicalproblem ofmaking 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 allowingmotor fuels used onethe public hi ways to be accounted for by the method set out in Article 9.13 7), above-quoted. r And, since the use of an accounting.method based upon an "averagemiles 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 clearlywithin 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)

Itmay be that either of the proposedmethods of accounting is satisfactoryfor bothmotor fuels and special fuels, or that othermethods of accounting not yet known or contemplatedmay provemore desirable. In any event, it is clearly the Comptroller'sprerogative under the above-referenced statutes to require sufficient and satisfactoryproof of the off-highwayuse and to promulgate rules and regulations concerningaccountingmethods 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 basedupon an accountingmade in accordancewith the procedure set forth in numberedparagraph one, above, and that you may legallypay a tax refund to a licenseddealer or to a licensed user on special fuels based upon an accountingmade 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 accountingmethods which may legallybe used; however, in the absence of other statutory directives it is perhapsmost 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 instanceswhen 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 userwho 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, orwho shall file any invoice in
a claim for tax refund upon which anv date. figure. signature, or othermaterial information is false - or incorrect, shall forfeit his right to the entire amount of the refund claim filed." (Emphasisadded.)

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:

"'Motorvehicle'means any automobile, truck, pickup, jeep, stationwagon, bus or similar vehicle,propelled by a motor or internal combustion engineupon 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 vehiclewhen propelled 'orservicedwith special fuels for propulsion, (Emphasisadded,) upon the public highways."

A tfuck, or other vehicle,while devoted to off-highway use is not a "motor vehicle"within the statutor7 definition. Therefore, it would seem that Article 10.14 (3 is inapplicableto the fact situationpresented in your opinion request.

Was it the intent of the legislature to provide by Section 

### (3)ofArticle 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 "motorvehicle?" Section (1)of.the
sameArticle (quotedon page 

### 3 herein) is obviously the section by which the legislature intended to declarewho should be en- .titledto 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, itwould be directly contrary to and incon,sistent with Section (1)wherein itsis 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 isolatedparts. It is our.duty to harmonize the various parts of a statute,whenever possible, keeping in mind the intent ofthe 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 (seeArticle 10.08 quoted above) it permits such refunds for use of the same type fuel under similar circumstances by others. Norwould 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'.devotedto.'.,offhighway use;',the'n'the 1egislature:must have intended to add aft~er the underlined ,portionof Section,(a),abov~e., "and used to propel said vehicl~e

upon a public highway" or words,of similar, import;for in no other wayscan'the statutebe:harmonized‘and the legislative intent be givenmeaning 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 stationarypower plant; as in the case at hand.. .

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

Reference is alsomade in your opinion request to OpinionNo. v-1563 of this office, dated Dec.ember22, 1952, which you construeas authorityprohibiting the Comptroller from promulgatinga rule or regulation allowing tax deductions
on special fuels used in powerunits from the same fueltanks which propel the motor vehicle over the highways. That opinion dealtwith the levy of the tax on special fuelswhen such fuelswere delivered into the fuel tanks ofmotor vehicles. The basic principlesstated in OpinionNo. v-1563 are still correct. Various provisionsof the special fuels tax statute still levy the tax at the point of delivery~of the special fuel into the fuel tanks of a.motorvehicle, 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 taxeswhen such fuel is used for any purpose other than propelling a motor vehicleupon the public highways of .thisState, has been added to the statute. Thus, inmost instances the tax is still leviedwhen the special fuel is delivered into the fuel tanks of a motor vehicle, as required by the provisions of Article 10.03 andArticle lo113 cited above, but the taxpayermay yet claim a refund of such taxes if the special fuel so delivered'isnot used to propel the vehicle upon the publichighways, and the allowanceof such refund is in no way contrary to the provisions ofArticles 10.03 or Article 10.13,
nor is it inconsistentwith the holding of Opinion No. v-1563.

You also refer ,toa possible inconsistency-inour holding in OpinionNo. WW-1280, datedMarch.23, 1962,which holds that special fuels delivered into the fuel supply tank of a motor vehicle are not subjectto tax refunds on the part of such fuel used to operate air conditioners installed on such vehicles. Althoughwe believe some of the reasoning~ofthat opinion is open to question,we are not prepared to overrule its holding. Air conditioningon a motor vehicle is a part of themachinery usedwhile 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 comparableto the automatic transmission, horn, lights, radio,windshieldwipers, windshield washers,~ heater, cigarette lighter and otherpower accessories in
commonuse today inmotor vehicles. Each of these accessories drains a certain amount of power off the engine of the motor vehicle, in oneway or another. The vehicle would obtainmore mileagewithout such accessories;therefore, in a sense, the amount of fuel used to operate such accessories is not used to propel the vehicle over the publichighways but ratherto shiftthe gears, sound the horn, light the lights, etc. However, the overallpurpose of all these accessories is to contribute to the task of propellingthe motor vehiclewith its cargo over the highway; all are part of a group of separate. . , .

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

pieces of machineryput together for a common purpose. A motor vehicle is not just an engine resting on a frame connectedto 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 Comptrollermay refund motor fuel (gasoline)tax and special fuels (butane, diesel fuel, etc.) tax when such fuels are used for purposes other than propellingmotor 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 Comptrollermay. legally authorize in the case ofmotor fuel taxes, the method of accounting for same set out in numbered paragraph one, above. In the case of special fuels taxes,~the Comptrollermay pay a tax refund to a licensed dealer or licenseduser 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