                    THE   ATI-ORNEY                  GENERAL
                              OF      =XAS
                             Ausnlv    11.   TEXAS

  BVIJiL   WILSON
A1TGRNEY     GENERAI.

                              March 16, 1961


Honorable Robert S. Calvert              Opinion No. NW-1019
Comptroller of Public Accounts
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 carburetor of a motor
                                                     vehicle when the flow line
                                                     connecting said tank and
                                                     carburetor is temporarily
                                                     cut off by valve pending
                                                     use of such special fuels
                                                     to operate stationary
Dear Mr. Calvert:                                    pumping unit 9.
          You have asked this department for an opinion on the ques-
tion hereinafter set forth and have given US a stated set of facts in
connection therewith which are as follows:
                 “The Western Oil Transportation Company,
            Inc., Midland, Texas, operates fifty or more
            truck tractors hauling crude -oil and other
            petroleum liquids in cargo tanks mounted on
            semi-trailers,  which trucks are equipped with
            motor-powered units used to pump the oil into
            and from the cargo tanks. The pumping units
            are propelled by the same motor which propels
            the trucks in daily travel over the public
            roads and highways in going to and from
            storages and oil well locations or other out-
            lets.
                “Each truck is equipped with two separate
            fuel tanks both of which are connected to and
            feed the carburetor which supplies special
            fuels to the truck’s motor whic,hgenerates
            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 pumping units do not operate while
            the truck is moving over the highway. Each of
Honorable Robert S. Calvert, Page 2     (Opinion No. WW-1019)


         the two fuel supply tanks is equipped with a
         cutoff valve, 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-powered pumping
         unit.
              "This company is classified by Article
          10.11-(l) as a non-bonded user who is required
          to pay the tax to the supplier on all special
          fuels purchased."
      Your question is as follows:
             "1. Is the Comptroller precluded by
         Article 10.14(3), above quoted, from re-
         funding the tax paid on special fuels
         delivered by a licensed user into a separate
         fuel tank connected to and feeding the car-
         buretor of a motor vehicle when the flow
         line connecting said tank and carburetor is
         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 otherwise provided by
          Article 10.15 of this Chapter, any licensed
         dealer who shall have paid the tax imposed
         by this Chapter upon any liquefied gas or
         distillate fuel which has been used or sold
         for use by such dealer for any purpose other
         than propelling a motor vehicle upon the
         public highways of this State, or which has
         been sold to the Unlted States Government for
         the exclusive use of said government, and any
         licensed user who shall have paid said tax
         upon any liquefied gas or distillate fuel
         which has been used by such user for any pur-
         pose other than propelling a motor vehicle
         upon said public highways, may file claim
         for a refund of the tax or taxes so paid,
r   r




    Honorable Robert S. Calvert, Page 3    (Opinion No, WW-1019)


             less one percent (1%) allowed suppliers for
             the expense of collecting and reporting such
             taxes to this State. Such ,claimsshall be
             filed with the Comptroller on forms prescribed
             by the Comptroller and shall show the date of
             filing and ~theperiod covered in the claim,
             the gallons of~liquefied gas and the gallons
             of distillate fuel sold or used for purposes
             subjectsto taxirefund, and shall show such
             other facts and information as the Comptroller
             may by rule and regulation require. Every such
             claim shall be supported by 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
             Comptroller within six (6) months from the date
             the special fuels were invoiced or required to
             be invoiced for sale or use, and no claim shall
             ,be made by the’claimant or approved by the
             Comptroller when the sale of such special fuels
             or the appropriation for use occurs more than
             six (6) months prior to the date the claim is
             filed.
                 “(2) When liquefied gas or distillate fuel
             is sold~by a deal~eror is appropriated for use
             byea user for any purposes for which a refund
             of the tax paid on said products may be claimed
             as provided herein, such dealer or user shall,
             at the time of each sale or appropriation for use
             and not thereafter, make out a serially numbered
             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 for use, the quantities
             of liquefied,gas and/or distillate fuel sold
             or appropriated for use, the purposes for which
             said products will be used, as declared by the
             purchaser or user, and such other information as
             the Comptroller may require. The invoice shall
             be signed by the recipient of any such special
             fuels purchased 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 ‘or hisauthorized
             represenbatives, and the other counterpart shall
             be fil,edas a part of the ,claimfor tax refund
             as above provided.
Honorable Robert S. Calvert, Page 4     (Opinion No. WW-1019)


                  I’(3) Any dealer or user who shall
              file claim for refund of the tax on
              any special fuel which has been de-
              livered 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
              other material information is false or
              incorrect, shall forfeit his right to
              the entire amount of the refund claim
              ‘filed.”
          Attorney General’s Opinion No. o-2381, written by this
department under date of July 25, 1940, covers several questions
in connection with refunds of taxes on motor fuels. Some of the
situations covered in this opinion are as follows:
                  “1. Oil field equipment ia used which
              Is a licensed or registered motor vehicle
              (truck). On this truck is mounted a
              drilling rig.  The truck motor 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
              equipment mounted on the truck strictly
              as a stationary engine. This is accomplished
              through a power take-off which separates the
              motor from the truck while so used.
                   “2. This same procedure is used in
               connection with the following classes of
               work; namely, post-hole drilling for power
               lines, pumping oil into tank built on the
               same truck, feed-grinding mills, oil well
               cementing, oil well treating, fire engines
               for pumping water on fire after arrival.”
                   ,I. . . .

                   “The following situation has never
               arisen; however, the facts are true, and
               as such must be given consideration. A
               farmer or rancher uses a registered truck;
               thereon he 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 private
Honorable Robert S. Calvert, Page 5     (Opinion No. 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."
          Opinion No. o-2381 held that in these situations the
refund should be allowed if the fuel was shown to have been
used for operating and propelling the registered truck in
question upon 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 clearly provides for the
refund of taxes paid on fuel which has been used or sold for
use for any purpose other than propelling a motor vehicle upon
the public highways of this State or which has been sold to the
United States Government for the exclusive use of said govern-
ment.
          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 forfeit his 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 above mentioned.
However, the statutes throughout show the intention of the
Legislature to levy a tax on motor fuels and special fuels
used or sold for the purpose of propelling motor vehicles
over the highways; only on that part of the fuel used for
propelling such motor vehicles on the highways of this State.
It is the further intent of the Legislature to refund the tax
on fuels used for purposes other than that of propelling motor
vehicles over the highways of this State, if it can be deter-
mined what amount of the fuel was used for the different pur-
poses.
          It is our opinion that Section 3 has reference to
fuels delivered into the fuel supply tank of a motor vehicle
which travels part time on the highways and part time on private
property with no way of determining the amount of fuel used on
private property and the amount used on the highways.
Honorable Robert S. Calvert, Page 6     (Opinion No. W-1019)


          However, in the fact situation given by y’outhe re-
fund is authorized because in this specific situation the 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 the motor at a time when it is not pro-
pelling the vehicles over the public highways but is being used
to propel a power take-off shaft to operate a stationary pump
for loading or unloading the cargo of the truck.
          To demonstrate this more clearly -- if this were a
separate motor mounted on the rear-end of this truck so that
it could not be used for propelling the truck and the fuel was
supplied from a separate tank as in this case clearly in our
opinion the refund should be allowed for the fuel used in this
separate motor.
          In the instant case the fuel is used out of one tank
to supply the motor while it is being propelled over the public
roads. Then the truck is parked on private property~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 stationary pump, 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 separate unit
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 fuel used to
operate this motor for the use of loading or unloading the
cargo of the truck, which fuel is being supplled from 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 preclude you from refunding the tax paid on such
special fuels. The Special Fuels Tax Act authorizes you to
require such affidavits or other information which you deem
necessary to establish that the facts in this situation are
as have been stated.

                        SUMMARY

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




    Honorable Robert S. Calvert, Page 7        (Opinion No. 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 stationary pumping units.
                                   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
