Opinion ID: 532094
Heading Depth: 2
Heading Rank: 2

Heading: The Tennessee Inspection Fee

Text: 12 The jobbers purchased gasoline from Amoco at its Nashville, Tennessee terminal. The Kentucky jobbers would travel to Tennessee; load their trucks with Amoco gasoline; and return to Kentucky where the product was resold. 13 The Tennessee Department of Revenue imposes an inspection fee or special tax of one cent ($.01) per gallon on all petroleum products sold, used, or stored in the state. Special Tax on Petroleum Products Law, Tenn.Code Ann. Sec. 67-3-904 (1983). However, if the petroleum is subsequently exported out of Tennessee, the fee is only one-twentieth of one cent ($.0005) and Amoco is entitled to a refund of nineteen-twentieths of one cent ($.0095) per gallon exported. In the alternative, Amoco may apply for a credit for the exported gasoline when it files its tax return with the Tennessee Department of Revenue. Tenn.Code Ann. Sec. 67-3-910(a). If Amoco stores the gasoline and ships it outside of the state before paying the special tax on each gallon exported, Amoco is only required to pay one-twentieth of one cent ($.0005) per gallon. Tenn.Code Ann. Sec. 67-3-910(b). 14 The 1981 jobber contracts had a specific provision pertaining to taxes which provided that: 15 V. Taxes: Any tax ... inspection fee, ... or other like charge which is levied, assessed or imposed by federal, state or local authority upon the products and/or transactions contemplated hereunder (including delivery, sale, use or consumption of the products or privilege of doing any of same), and/or which is imposed or measured by the price of the products or the proceeds of sale hereunder, shall be added to [Amoco's] price or prices set forth herein and shall be paid by the buyer, unless said price or prices specifically state that they include any such charge or charges. 16 There was no reference to the inspection fee on the invoices documenting the sale of petroleum to the jobbers; however, it was included as part of the Established Price Amoco charged the jobbers for petroleum purchased at the Tennessee terminals. 17 Although the jobbers did not bring this action until February, 1983, McGuirk and Belcher testified that since 1970 and 1973 respectively, they believed Amoco had charged them the full one cent ($.01) inspection fee as part of the Established Price they were required to pay. At no time before 1983 did any one of the three Kentucky jobbers ever complain, in writing, that they knew Amoco had collected the full tax, and subsequently failed to pass on the partial rebate received from the Tennessee Department of Revenue. This action was finally brought after the relationship between Amoco and the jobbers was terminated.