GENERAL THE ATI-ORNEY

OF =XAS

BVIJiL WILSON
A1TGRNEY GENERAI. Ausnlv 11. TEXAS

March 16, 1961

Honorable Robert S. Calvert OpinionNo. NW-1019 Comptrollerof PublicAccounts Capitol Station Re: Whether the Comptroller is Austin, Texas precluded by Art. 10.14( 3), V.C.S., from refunding the tax paid on special fuels connecting to and feeding the carburetorof a motor vehiclewhen the flow line connecting said tank and carburetoris temporarily cut off by valve pending
use of such special fuels to operate stationary Dear Mr. Calvert: pumping unit9.

You have asked this department for an opinion on the question hereinafter set forth and have givenUS a stated set of facts in connection therewithwhich are as follows:

“The Western Oil TransportationCompany, Inc.,Midland, Texas, operates fifty or more truck tractorshauling crude-oiland other petroleum liquids in cargo tanksmounted on semi-trailers, which trucks are equippedwith motor-poweredunits used to pump the oil into and from the cargo tanks. The pumpingunits
are propelled by the same motor which propels the trucks in daily travel over the public roads and highways in going to and from storagesand oil well locationsor other outlets.

“Each truck is equippedwith two separate fuel tanks both of which are connected to and feed the carburetorwhich supplies special fuels to the truck’smotor whic,h generates power for the propulsion of the truck on the highway and also the power which operates the pumping units to load and unload the cargo tanks

. The pumpingunits do not operate while the truck is moving over thehighway. Each ofHonorable Robert S. Calvert, Page 2 (OpinionNo. WW-1019)

the two fuel supply tanks is equippedwith a cutoffvalve, and the claimant states that the fuel from one tank is used to propel the vehicle
over the highway and fuel from the other tank is used to operate the motor-poweredpumping unit.
"This company is classifiedby Article 10.11-(l)as a non-bondeduser who is required to pay the tax to the supplier on all special fuelspurchased."

Your question is as follows:

"1. Is the Comptrollerprecluded by Article 10.14(3),above quoted, from refundingthe taxpaid on special fuels deliveredby a licenseduser into a separate fuel tank connected to and feeding the carburetor of a motor vehicle when the flow line connecting said tank and carburetoris temporarily cut off by valve pending use of such special fuels to operate stationary pumping units?"
Chapter 10, Title 122A,V.C.S., provides for the tax on special fuels.

Article 10.14, Chapter 10, Title 122A,V.C.S., provides for refunds and Sections 1, 2 and 3 of such Article 10.14 read as follows:
"(1) Except as otherwiseprovided by

Article 10.15 of this Chapter, any licensed dealer who shallhave paid the tax imposed by this Chapterupon any liquefiedgas or distillate fuel which has been used or sold for use by such dealer for any purpose other than propelling a motor vehicleupon the public highways of this State, or which has been sold to the Unlted States Government for the exclusiveuse of saidgovernment, and any licenseduser who shallhave paid said tax upon any liquefiedgas or distillate fuel whichhas been used by suchuser for any purpose other than propelling a motor vehicle upon saidpublichighways, may file claim for a refund of the tax or taxes sopaid,r r

Honorable Robert S. Calvert, Page 3 (OpinionNo, WW-1019)

less one percent (1%)allowed suppliers for the expense of collectingand reporting such taxes to this State. Such ,claimsshall be filedwith the Comptroller on formsprescribed by the Comptrollerand shall show the date of filing and ~theperiod covered in the claim, the gallons of~liquefiedgas and the gallons of distillate fuel sold or used for purposes subjects

to taxirefund, and shall show such other facts and informationas the Comptroller may by rule and regulationrequire. Every such claim shallbe supportedby an invoice or invoices issued by the claimant,as hereinafter provided, and shall be verified by affidavit of the claimant and filed in the office of the Comptrollerwithin six (6) months from the date the special fuels were invoiced or required to be invoiced for sale or use, and no claim shall ,bemade by the’claimant or approvedby the Comptrollerwhen the sale of such special fuels
or the appropriation foruse occursmore than six (6) months prior to the date the claim is filed.
“(2) When liquefiedgas or distillate fuel is sold~by a deal~er or is appropriated for use bye a user for any purposes for which a refund of the tax paid on saidproductsmay be claimed
as providedherein, such dealer or user shall, at the time of each sale or appropriation for use and not thereafter,make out a seriallynumbered invoice in not less than duplicate counterparts with the name and address of the dealer or user printed thereon which shall show the date of the sale or appropriation foruse, the quantities of liquefied,

gas and/or distillate fuel sold
or appropriated for use, the purposes for which saidproducts will be used, as declared by the purchaser or user, and such other informationas the Comptrollermay require. The invoice shall be signedby the recipient of any such special fuelspurchased from a dealer. One ccunterpart of each invoice shall be kept by,the dealer or user for a period of two (2)years open to the inspection of the Comptroller‘orhisauthorized represenbatives,and the other counterpart shall be fil,ed

as a part of the ,claimfor tax refund
as aboveprovided.Honorable Robert S. Calvert, Page 4 (OpinionNo. WW-1019)

I’ (3) Any dealer or user who shall file claim for refund of the tax on any special fuel which has been delivered into the fuel supply tank of a motor vehicle, or who shall file any invoice in a claim for tax refund upon which any date, figure, signature,or othermaterial information is false or incorrect, shall forfeithis right to the entire amount of the refund claim ‘filed.”
Attorney General’s OpinionNo. o-2381, written by this departmentunder date of July 25, 1940, covers severalquestions in connectionwith refunds of taxes onmotor fuels. Some of the situationscovered inthis opinion are as follows:

“1. Oil field equipment ia used which Is a licensed or registeredmotor vehicle (truck). On this truck is mounted a drilling rig. The truckmotor is used for tf;;mp;fi;Eef;

p$;aepropelling the vehicle

which may be on public roads or highways,private property, such as leases, or both; (b) operating the equipmentmounted on the truck strictly
as a stationaryengine. This is accomplished through a power take-offwhich separatesthe motor from the truck while so used.

“2. This same procedure is used in connectionwith the following classes of work; namely,post-hole drilling forpower lines,pumping oil into tank built on the
same truck, feed-grindingmills, oil well cementing, oil well treating, fire engines for pumping water on fire after arrival.”
,I

. . . . “The following situationhas never arisen;however, the facts are true, and
as suchmust be given consideration. A farmer or rancheruses a registered truck; thereonhe would have two fuel tanks and keep the fuel used for traveling on the roads or highways separate from that used while driving the same truck on his privateHonorable Robert S. Calvert, Page 5 (OpinionNo. WW-1019)

property. This would require a switch from one fuel tank to the other at the proper time; and, furthermore, such trucks would not have a power take-off arrangement." OpinionNo. o-2381held that in these situationsthe refund shouldbe allowed if the fuel was shown to have been used for operatingand propelling the registered truck in questionupon private property and not upon and along highways of this State. As indicated in the above opinion and the courts generally,where there is an ambiguity the question should be decided in favor of the taxpayer.

Section 1 of Article 10.14 clearlyprovides for the refund of taxespaid on fuel whichhas been used or sold for
use for any purpose other than propelling a motor vehicle upon the publichighways of this State or whichhas been sold to the United States Government for the exclusiveuse of saidgovernment.
Section 3 of Article 10.14 reads, in part, as follows:
"Any dealer or user who shall file claim for refund of the tax on any special fuel which has been delivered into the fuel supply tank of a motor vehicle.

. .

shall forfeithis right to the entire amount of the refund claim filed."

It seems that there is some conflict between the wording of Section 1 and that of Section 3 abovementioned. However, the statutes throughout show the intention of the Legislature to levy a tax onmotor fuels and special fuels used or sold for the purpose of propellingmotor vehicles
over the highways; only on that part of the fuel used for propelling suchmotor vehicles on the highways of this State. It is the further intent of the Legislature to refund the tax on fuelsused forpurposes other than that of propellingmotor vehicles over the highways of this State, if it can be determined what amount of the fuel was used for the differentpurposes.

It is our opinion that Section 3has reference to fuels delivered into the fuel supply tank of a motor vehicle which travelspart time on the highways and part time on private property with no way of determiningthe amount of fuelused on private property and the amountused on the highways.Honorable Robert S. Calvert, Page 6 (OpinionNo. W-1019)

However, in the fact situationgiven by y’outhe refund is authorizedbecause in this specific situationthe fuel is not delivered into the fuel tank which supplies fuel to the motor while traveling on the public highways. The fuel on which the refund is asked is delivered into a separate tank which is used only for operating themotor at a time when it is not propelling the vehicles over the public highways but is beingused to propel a power take-off shaft to operate a stationarypump for loading or unloading the cargo of the truck.

To demonstratethis more clearly -- if this were a separatemotor mounted on the rear-end of this truck so that it could not be used forpropelling the truck and the fuelwas supplied from a separatetank as in this case clearly in our opinion the refund should be allowed for the fuel used in this separatemotor.

In the instant case the fuel is used out of one tank to supply the motor while it is beingpropelled over the public roads. Then the truck is parked on privateproperty~ and the motor is disengaged from the gears which propel the truck, and is engaged in another gear which propels the power take-off shaft to the stationarypump, and the fuel is supplied from a different tank than that used to propel the motor vehicle over the roads. In effect, it becomes a completely separateunit from the motor vehicle which is used on the public roads.

Based on the facts which you have submitted, it is the opinion of this department that the special fuelused to operate thismotor for the use of loading or unloading the cargo of the truck, which fuel is being supplledfrom a tank which is used only while the truck is standing still and not being used on the public roads, is not subject to tax or the tax is subject to be refunded and Article 10.14(3),V.C.S., does not precludeyou from refunding the tax paid on such special fuels. The Special Fuels Tax Act authorizesyou to require such affidavits or other informationwhich you deem necessary to establish that the facts in this situationare as have been stated.

SUMMARY

The Corn

troller E(3), is not precluded ,by Article 10.1 V.C.S., from refunding the tax paid on special fuels deliveredby a licenseduser into a separate fuel tank connected to and feeding the carburetor of!

Honorable Robert S. Calvert, Page 7 (OpinionNo. WW-1019)

a motor vehicle when the flow line connecting said tank and carburetor is temporarily cut off by a valve pending use of such special fuels to operate stationarypumpingunits.

Yours very truly,

WILL WILSON Attorney General of Texas

JHB:jp

APPROVED:

OPINION COMMITTEE: W. V. Geppert, Chairman

J. Arthur Sandlin W. E. Allen Elmer McVey W. Ray Scruggs

REVIEWED FOR THE ATTORNEY GENERAL By: Morgan Nesbitt