: E

Mr. Robert ,S. Calvert Comptroller of State of Texas Austin, 

### Texas Opinion No. ~~-1280

Public Accounts Re: Whether tax refund may bemadeonspecial fuel delivered by the user thereof into the fuel supply tank of amotor vehicle, under the provisions of Chap. 10of Title 122A, TaxatlonDear Mr. Calverr;: tieneral. You ask the opinion of this office relative to two questions 

### concerning refund of the State excise tax imposed onSpecial 

### Fuels byChapter 10of Title 122A, Taxation-General, V.C.S., and 

### which **fuels** have been delivered by the user Into the fuel supply 

### tank of amotor vehicle. Your questions are as follows:

“1. Does Article 10.14(3).

. .preclude payment of atax refund on any part of a delivery of special fuels into the fuel supply tank of amotor vehicle for propulsion onthe highway which is used to operate stationary air condit~ioning units installed on said vehicle? i

**“ 2.**  If you should hold that payment of a tax refund as described in Question 1, is not precluded by law, then the Invoice required by Article lO.14(2) to be Issued at the time of appropriation for use andnot thereafter ard acopy filed as part of the claim, could not be issued until after the fuel hadbeen used since the quantity used in such air 

### conditioners would be computed from the per

### hour use factor. In such case, could the Comptroller accept, as consistent with the law, aninvoice issued at the end of the day or other operating period showing the total gallons appropriated andused in such air conditioning units whensuch invoice is filed as apart of the refund claim?”

. .Mr. Robert S. Calvert, Page-2 Opinion No. ~~-1280 ;:: .:,,

Weanswer your first question “Yes”

. This answer precludes our answering your second question. Thefacts which have given rise to your questions are stated byyou as follows:

“The SanAntonio Transit System, owned and operated by the City of SanAntonio, has asked for an opinion as to whether or not It can compute the tax on special fuels used In Its bus air conditioning units for tax refund purposes in which the fuel Is not physically measured but is based onthe quantities shown to have been used each hour of operation In tests madeoneach type and model air conditioner used.

“The speclal,fuels purchased bythe San Antonio Transit System is predominantly for delivery into the fuel supply tanks of its vehicles for use onthe highway. Article 10.11 classifies such operation as anon-bonded user required byArticle 10.03(3) to pay the tax to its supplier with the right granted byArticle 10.14(l) to claim tax refund onthe fuel used for any purposes other than propelling motor vehicles onthe highway (such as use in ’”’

.“‘
~‘a&conditioners).

“Its air conditioning units are operated while the vehicles are being propelled over the streets with fuel supplied from the same fuel tank used to propel the motor vehicles. Theflow lines to the air conditioners are not equipped with meters or other measuring devices to measure the fuel used in such units.

“The SanAntonio Transit System proposes to account for the special fuels used in such air conditioners on anhourly basis computed as follows: someof the air conditioners would be tested with measured special fuels while operating.

. . to determine the quantity used per hour of operation. Thehourly quantity so determined would be multiplied by the aggregate number of hours all of the air conditioning units operated during the month to establish the total gallons used andtax. .

Mr. Robert S. Calvert, 

### Page 3 

### OpknlonNo. WW-1280

refund claims would be filed onthe total gallons shown." In 1959, at Its Third Called 

### Session, the ,56th Legislature enacted the present "Special Fuels TaxLaw" (sometimes hereinafter referred to as this Law). This Lawis Chapter 10of House Bill No. 11; this House Bill constitutes Cha

### ter 1of the Acts of this Third Called Session, 1 shown at page 17, et seq., of the Official Acts of the Called Sessions of the 56th Legislature. Chapter 10of this House Bill is codified byVernon as Chapter 10of Title 122A, Taxation-General. Article 10.14(3) of the Special Fuels TaxLawreada as follows: "(3) 

### Anydealer or user whoshall file

claim for refund of the tax on any special fuel which has been delivered into the fuel supply tank of amotor vehicle, or whoshall file any invoice in aclaim for tax refund upon which anydate, figure, signature or other material information is false or Incorrect, shall forfeit his right to the entire amount of the refund claim filed." (Underscoring added.) Webelieve that this Section (3) controls and prevails over all other provisions of this Lawrelating to refund of taxes on special fuels. Further, webelieve all of the refund provisions relating to special fuels must be strictly construed In that they are in the nature of exemptions from taxation. City of Longview v. Markham-McRee Memorial Hospital, 137Tex. 178, 152 SW2d 1112 (1941) State v. City of El Paso, 135 Tex. 359, 141 S.W.2d 366 (1940),'4-, Sec. 74. Very clearly the Special Fuels TaxLawi& complete In every respect with reference to the authorization for, and the manner of making claim for andpayment of refunds of the tax paid to the State on all special fuels. Weobserve that this Lawmakes distinction between: 

### One: Appropriation for use of special fuels (see Sections (1) and (2) of Article 10.14). 

### Two: Use of special fuels, whether to propel motor vehicles upon or off the public highways, or for some other purpose (see Articles 10.14(l), 10.05(2) and 10.12(3)).Mr. Robert S. Calvert, Page 4 Opinion No. ~11-1280

Three: Delivery into the fuel supply tanks of motor

vehicles. (see Articles 10.03(5), 10.13(k) and 10.14(3)). Article 10.03 of this Law, which levies the tax on special fuels, 

### In Section (5) states in part:

“Every user shall report andpay to this State the tax, at the rate Imposed, on each gallon of special fuels delivered byhiminto the fuel supply tanks of motor vehicles, unless said tax has been paid to alicensed supplier.

. . .‘I Wedonot believe that the special provisions of Article 10.08 which authorize the Comptroller, in his discretion, to use a mileage basis 

### in determining the amount of tax due to be appllcable to the fact situation under consideration. Further, we donot believe that you are authorized byArticle 10.21 of the Lawto promulgate rules and regulations relating to the ellglbillty of special fuel for tax refund which would conflict with the clear mandatory provisions of this Lawwhich relate to special fuel which has been delivered into the fuel tanks of motor vehicles. (Articles 10.03(5), 10.13(Q) and 10.14(3), hereinabove mentioned.) .Werecognize ;4hatArticle 10.03(l) levies and imposes the tax only upon the e . .use of special fuels for the propulsion of motor vehicles upon the public highways of this State.

. . .” However, with reference to refund of the tax paid upon special fuels which have been delivered by the user into the fuel supply tanks of motor vehicles, webelieve that Section (5) of this sameArt. 10.03, construed together with Articles 10.13(b) and 10.14(3) makeclear that all such fuels have been used for a taxable purpose. SUMMARY ‘,

Special fuels delivered by the user thereof into the fuel supply tank of a motor vehicle are not subject to refund of the excise tax paid onthat fuel under. 1



### Mr.Robert S. Caluert, Page5 Opinion No. ~~-1280

the provisions of Article 10.03, Title 122A, 

### Taxation-General, V.C.S. Yours very truly, WILLWILSON Attorney General of Texas

WEA/rk APPRCVED: OPINIONCOMMITTEE: W.V. Geppert, Chairman

Arthur Sandlin Henry Braswell Virgil Pulliam John Reeves REXIEWFORTREATTORNEY GENERAL By: Houghton Brownlee, Jr. Assistant