TAX COURT OPINION

Case: NextEra Energy, Inc., and Subsidiaries
Docket Number: 5271-96
Judge: Ruwe
Opinion Type: reported
Filed: 02/01/2001
Pages: 10

116 T.C. No. 7 UNITED STATES TAX COURT - HMS FPL GROUP, INC. AND SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent (cid:16)042 Docket No. 5271-96. Filed February 1, 2001. On its consolidated Federal income tax returns for the years in issue, F claimed a. credit for Federal taxes on fuels. amounts'claimed on F's original Federal returns . contained in sec. 6427 (i) (1), F's additional claims for credit under sec. 34, the so-called "one claim". rule I.R.C., acts as a bar, to I.R.C. F now seeks credits in addition to R argues that ^ .. income tax Held: F is not barred by the so-called "one claim" rule of sec. 6427 (i) (1), additional credits under sec. 34, I.R.C., I.R.C. Robert Thomas Carney, for petitioner. James F. Kearney, for respondent. from obtaining SERVED FEB 1 2001 - 2 - OPINION RUWE, Judae: This matter is before the Court on respondent's motion for partial summary judgment filed pursuant to Rule 121.1 The sole issue presented is whether petitioner is barred by. the so-called "one claim" rule of section 6427 (i) (1) from obtaining a credit under section 34 for amounts of Federal excise taxes paid on fuels. Background FPL Group, Inc., is a corporation organized and existing under the laws of the State of Florida with its principal office located in· Juno Beach, Florida. FPL Group Inc. and Subsidiaries (petitioner) filed consolidated Federal income tax returns for the years 1988 through^1992. Petitioner attached to each return a Form 4136, Computation of Credit for Federal Tax on Fuels. Form 4136 is used to claim credit for Federal excise tax paid on fuels sold. or used during.the period.of the claim. On its Federal income tax returns for. those years, petitioner claimed credits for Federal taxes on fuels as follows: Year 1988 1989 1990 1991 1992 Credit $279, 732 233,053 275,303 391, 516 332, 568 1Unless otherwise indicated, all section references are to for the years in issue, and the Internal Revenue Code in effect all Rule references are to the Tax Court Rules of Practice and Procedure. - 3 - In its second amended petition, petitioner alleged that respondent erred in failing to allow additional fuel tax credits for vehicles which are not "highway· use" vehicles in the following amounts: Year 1988 1989 1990 1991 1992 . Credit $135,194. 136, 840 · 143, 340 202,096 215, 649 These amounts are in addition to the amounts claimed as credits on petitioner's original Federal income tax returns for those years. I . Summary ..Judgment Discussion Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. See Northern Ind. Pub. Serv. Co. v. Commissioner, 101 T.C. 294, 295 (1993); Shiosaki v. Commissioner, 61 T.C. 861, 862 (1974) . Rule 121(a) provides that either party may move for summary judgment upon all or any part of the legal issues in controversy. Full or partial summary judgment is appropriate where there is no genuine issue as to any material fact and a decision may be rendered as a matter of law. See Rule 121 (b) ; Sundstrand Corp. v . Commis sioner, 98 T . C . 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). Respondent, as the moving party, bears the burden of proving that no genuine issue exists as to any material fact and that he is entitled to judgment as a matter of law. See Bond v. Commissioner, 100 T.C. 32, 36 (1993); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). In deciding whether to grant summary judgment, the factual materials and the inferences drawn from them must be considered in the light most favorable to the nonmoving party. See Bond v. Commissioner, supra at 36; Naftel v. Commissioner, supra at 529. In the instant case, there is no genuine issue as to any of the material facts that we have set forth in the background section of this opinion. II. Sections 6427 and 34 Respondent argues that petitioner is making a second claim under section 6427 and that the so-called "one claim" rule contained in section 6427(i) (1) acts as a bar to petitioner's claim for credit. Petitioner argues that its claim for credit is being made under section 34 and that the "one claim" rule in section 6427(i) (1) has no application. A. Section 6427 Section 6427 provides a mechanism whereby a purchaser of fuel can obtain payment from the Secretary of taxes previously imposed on fuel which was not used for taxable purposes by the purchaser. See sec. 6427(a),2 17 _3 Subsections (a) and (1) of section 6427 specifically pertain to nontaxable uses of diesel fuel previously taxed under sections 4041t and 4091.5 Limitations on filing a claim for payment under section 6427 are addressed'in section 6427(i). The general rule of limitation for payment of claims filed under ^section 6427 is that not more than one claim may be filed by any person with respect to fuel used during the taxable year.. Section 6427(i) provides: SEC. 6427(i). Time for Filing Claims; Period Covered.-- . (1) General rule.--Except as provided in paragraphs (2), (3), and (4), not more than one claim may be filed under subsection (a), (b), (d), [e in 1988 2SEC. 6427(a). Nontaxable uses.--Except as provided in if tax has been imposed under section 4041(a) or ubsection (k), (c) on the sale of any fuel and the purchaser uses such fuel other than for the. use for which sold, or resells such fuel, Secretary shall pay (without to-- to him an amount equal interest) the 3SEC. 6427(1). Nontaxable uses of diesel taxed under section 4091.-- fuel fuel and aviation (1) * * In general.--Except as provided in subsection (k), * if any fuel on which tax has been imposed by section 4091 is used by any person in a nontaxable use, the Secretary ·shall pay (without ultimate purchaser of such fuel an amount equal aggregate amount of section 4091. tax imposed on such fuel under interest) to the - to the 4Sec. 4041 imposes a tax on fùel sold for use or used in a diesel-powered highway vehicle. was already imposed under sec. 4091. Sec. 4041 does not apply if tax See sec. 4041(a) (1). Sec. 4091 imposes a tax on the sale of any taxable diesel fuel by the producer ,or Taxable diesel highway vehicle. fuel See sec.. 4092(a). importer thereof. See sec. 4091(a). is that which is suitable for usè in a and 1989), (g), (h), (1), or person with respect taxable year; * * * to fuel used * in 1988] by any * during his * - 6 - (q) [ (p) Section 6427(i) does not refer to any claims filed under subsection (k) . Section 6427 (k) makes the following reference to an income tax credit in lieu of payment: SEC. 6427(k). Income Tax Credit in Lieu of Payment.-- (3) Allowance of· credit against income tax.-- For allowances of credit against the income tax imposed by subtitle A for fuel used or resold by the purchaser, see section 34. B. Section 34 Section 34 allows a credit against income tax imposed under subtitle A for the taxable year equal to the sum of the amounts payable to the ·taxpayer under section 6427. See sec. 34 (a) (3).' 6The exceptions provided in paragraphs (2), (3), and (4) of sec. 6427 (i) are not relevant to this case. Sec. 34 (a) provides: SEC. 34 (a). General rule.-- There shall be allowed as a credit against taxable year an amount equal payable to the taxpayer-- the tax imposed by this subtitle for the to the sum of the amounts (3) under section 6427-- (A) with respect to fuels used for nontaxable purposes or resold, or (B) with respect to any qualified diesel-powered highway vehicle purchased (or (continued. . . ) .However, credit is not allowed under section 34 (a) for an amount payable under section 6427, if a claim for such amount is timely filed and is "payable" under such section.e Sec. 34 (b) . C. Analysis The Court of Federal Claims has recently held that the "one claim" rule under section 6427 (i) does not bar timely claims for tax credit under section 34. See Schlumberger Tech. Corp. & Subs. .v. United States, -47 Fed. Cl. 298 (2000). We agree with the Court. of Federal Claims and its reasoning. Section 34 (a) (3) provides: ·"There shall be allowed as a credit * * * :an amount equal to the sum of the amounts payable to the taxpayer * * * under section 6427". The text of section 34 does not'suggest that the credit it affords is limited by any of the procedural.provlslons of· section 6427. . Rather,. the reference to section 6427 contained .in section 34 appears merely to be a convenient measure of the amount of the credit to be afforded. Section 6427(k) does not purport to control or limit the rights ( . .. . continued) . deemed purchased under section 642.7 (g) (6) ) , during the taxable year (determined without regard to section 6427 (k) ) . 8Sec. 34 (b) provides: SEC. 34 (b) . Exception.--Credit shall not be allowed under subsection (a) under section 6421 or 6427, if a claim for such amount is timely filed and, under section 6421(j) or 6427 (k), is payable under such section. for any amount payable afforded petitioner under section 34. Section 6427(k) (3) provides: "For allowances of credit against the income tax imposed by subtitle A for fuel used or resold by the purchaser, see section 34." The plain language of section 6427(k) (3) indicates that credits are provided in section 34, not section 6427. .Indeed, section 34 (b) contemplates that a taxpayer may have made claims for payment under section 6427 and disallows credit only to the extent it duplicates such claims. Respondent argues that section 6427(i), which generally prohibits the filing of more than one claim for payment, prohibits any credit if the taxpayer has made a prior claim for credit under section 6427(k). But section 6427(i) imposes the "one claim" rule only with respect to claims for payment made under specified subsections. Subsection (k) is not one of the specified subsections in subsection (i). And as previously explained, claims for credit are made under section 34, not section 6427(k). The legislative history of the Airport and Airway Revenue Act of 1970, Pub. L. 91-258, sec. 207, 84 Stat. 246, which added section 6427 to the Code, supports our. view that sections 34 and 6427 are parallel authorities. Section 207(a) of that act added section 6427 to the Code, while section 207(c) of the act, 84 Stat. 248, amended the existing section 39 (which is now section 34) by adding the language now-found in section 34 (a) (3).9 The text of the conference report provides, in part, as follows: This amendment.·provides procedures for the payment of amounts (under a new section 6427 of the Code) or for the crediting against section 39 of the Code) excise taxes on gasoline and special income tax (under the existing the retailers in the case of fuels. * * * The amendment also provides that, in general, the time for filing claims for credit under section 39, and the time for filing full-year claims by government bodies or exempt organizations for excise tax payments under specified sections. of comparable to the time in which.claim for credit or refund of.income taxes may be filed. the Code, will be The House recedes with technical changes. [Conf. Rept. 91-1074, at 51;(1970),'1970-1. C.B. 401, 407.] The conference report speaks of "procedures" to be made available, in a parallel structure of relief by "payment" ('section 6427) or by "crediting against income tax" (section 39). The conference report does not suggest that section 6427 provides the exclusive or otherwise controlling authority. The Senate report confirms.our conclusion that sections 39 and 6427 were viewed by Congress as parallel~authorities. The Senate report.provides the following discussion regarding the different treatments of credits against..income tax and payments under the exci.se tax provisions: Under income tax for gasoline, diesel or lubricating oil the committee amendments, credits against fuels, tax (sec. 39) are to give rise to fuels, special 9See supra note 7. - 10 - On the other hand, payments under the interest on overpayments as in the case of other income tax credits. excise tax provisions (secs. 6420, 6421, 6424, and 6427) lubricating oil regard to excise taxes (and as under present made without Rept. 91-706, at 23 (1970), 1970-1 C.B. 386, 399.] interest being paid to the taxpayer. taxes, as the case generally wïth law), are [S. for the gasoline, diesel fuels, special fuels, or The Senate report does not suggest that the credits available under section 39 were created or limited by section 6427. :The Senate report also notes the extension of the time within which a section 6427 claim may be made "will make the filing of full-year claims (but not the quarterly claims) for refunds (under secs. * * * 6427) similar to the new rule for claims for credits against income tax (under sec. 39)." S. Rept. 91-706, supra at 23, 1970-1 C.B. at 399. Thus, the relief afforded by sections 39 and 6427 appears to have been intended to be equal in authority and effect. III. Conclusion For the foregoing reasons, we deny respondent's motion for partial summary judgment, and we hold that petitioner is not barred by the so-called "one claim" rule.of section 6427(i) (1) from obtaining a credit for fuel tax under section 34 (a) (3). An acDropriate order will be issued denvina respondent's motion for partial summary iudament.